I work for a communications company that's been having layoffs for about 2 years now, I ended up here randomly. Anyhow, I've noticed that Sears' stock has been appreciating in value and that it has almost tripled since February.
I sometimes shop at Sears here in the OC, and the store is poorly supplied at best. I was assuming Sears was not doing good but now I am puzzled.
What's causing the appreciation in the value?
Thanks!
This stock is being squeezed by Ed and friends. He needs to keep the company going to position Seritage Growth Properties to take over the real estate; plus, if the company files BK too soon after selling all those assets; a BK judge could unwind all those deals, foiling Ed's SRG plan.
Seemed like a no-brainer short; but the small float, manipulation and day/swing traders has almost doubled this thing.
Not sure where the top of this is, but when the music stops, it will be ugly for any longs wishing for a turn around.
The jump is due to technical reasons.
In essence, you have way too many people rushing to short sell Sears as they anticipate that the price will go down. Short selling assumes that someone is willing to borrow you stock so you can sell it, at some point you'd need to return that stock. In order to return it, you need to buy it from someone, and since Eddie owns almost all shares that float right now, if he decides not to sell it to you so you can cover your short position, you need to go to someone else and attempt to buy it.
The problem is that, if for whatever reason the stock goes up that day (e.g., Hudson Bay announces that they may buy Macy's), there is a mad rush of people who are rushing to cover their short positions (fear). So, now everyone is chasing that one guy that sells stock (Eddie is not selling his) and people start to bid up the price for that small amount of stock that's floating around.
That bidding, that mad rush, is pushing the stock price up, Eddie still does not sell, and the price keeps going up. the more it goes up, the more short sellers panic or simply try to cover their positions or take profits, so the price continues to goes up.
So, the problem is that there is not enough stock floating around (float) and Eddie is comfortably waiting and sitting on his stock until the stars align and he's ready to do and execute whatever he really planned to execute (nobody really knows this as of now)...
I hope this helps. Do not short it...
Stocks being bought and sold by two people. One of whom runs a bunch of funds.
Check to see whats actually in your 401k or that your pension fund is buying/holding.
Google "stock short squeeze" and it should be able to give you the answer you're looking for. But don't worry Sears will one day come crashing down
Hi all - I am the Original Poster, thanks for the insight and goood luck.
It could be the massive inside stock purchases by the ceo and a board member.
The stock price fluctuates up and down driven by a lot of things that have nothing to do with the underlying strength of the company. SHLD is very heavily short sold, which is a bet the stock price will go lower. When these people take profits, it pushes prices up. Then other people might bet the company will not go bankrupt just yet, pushing the price higher temporarily. There are huge profits to be made for people who get the pattern right. But the reality is, Sears and Kmart retail are doomed.
I'll let the real finance people answer but what you noticed is correct for all the stores I know on the east coast too.
The stock price increasing has to do with the company's CEO buying a lot of the stock right now & his friend buying a lot through his investment fund as well. It manipulates the stock price & makes it go higher although the actual business hasn't gotten any better.
The details are better explained by someone else though.