It’s been a brutal year for Sears Holdings(SHLD) and a brutal year for Eddie Lampert’s hedge fund ESL investments. ESL has recently handed over shares of AutoNation(AN) to investors, presumably to cover redemptions, but it looks like Mr.
Lampert is not willing to part with shares of Sears. The WSJ reports, based on public filings, that Lampert purchased 4.46 million shares of Sears from the fund, and spent another $12 million purchasing shares on the open market. In our opinion this is a positive sign. That Lampert did not inject cash into the company by purchasing new shares, or by purchasing new securities senior to common equity, or by purchasing outstanding distressed debt, sends a strong message that he does not believe the company is at risk of bankruptcy or that it faces a liquidity crunch.
UPDATE: Redemptions were paid in AutoZone(AZO) shares, not AutoNation which ESL also owns a large stake in.
Disclosure: The author owns shares of SHLD
- Has The End Begun For Sears Holdings? CIT Stops Financing Sears Vendors (inelegantinvestor.com)
- Beyond Sears, Eddie Lampert Has A Mixed Year in the Stock Market (online.wsj.com)