Thread regarding Sears layoffs

Sears CEO Eddie Lampert behind Kmart decimation

Most folks don’t know the name Eddie Lampert, unless they are a Sears or Kmart employee or retiree. Eddie started his career at Goldman Sachs, where he and his college roommate, Treasury Secretary Steve Mnuchin, learned how to extract cash from stable companies, then use it to place and hedge risky bets.

While Mnuchin and Goldman Sachs were using this strategy to shipwreck Montana Power, Eddie started up a hedge fund, and bought a yacht he named Fountainhead, after Ayn Rand’s lousy novel. In 2004 his fund became majority shareholder in Sears and he orchestrated the merger with Kmart. The stock soared, but rather than invest profits back into the company by upgrading stores or developing an online marketplace, Eddie extracted the cash and sunk it into his hedge fund.

The neglect of the company’s core business made it uncompetitive in the changing retail market. Sears and Kmart needed loans to stay afloat, and right there waiting to write the checks was Eddie Lampert. Hundreds of millions of dollars later, Eddie is not only Sears CEO, he is also their biggest creditor. Any cash the company makes pays double-digit interest rates on the loans he gave.

When Eddie finally bankrupts Sears, as its chief creditor, he will be first in line to receive the valuable real estate holdings still in the company’s portfolio. What is left of Kmart and Sears are now worth more to him dead than alive.

Thanks to the massive reduction in corporate taxes, the Eddie Lamperts of the world have even more cash to extract from, rather than reinvest in, their companies. Wall Street loves it and the stock market bubble we are now seeing is being fueled primarily by cash flush investors betting that with every passing day of this pump and dump administration, they will have an even more deregulated market, where they can make money both winning and losing.

For the rest of us, we can at least pick the bones at the going-out-of-business sale at Kmart. The address is 3300 Harrison Avenue in Butte, ground zero of making America great again.

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Sorry, you don't get it. Explains why you work at sears and make minimum wage.

Congrats, you win the prize, you actually do get it (one out of ten on here do). I suspect you're a day trader coming here to laugh at the idiots like I do.

Bottom line gang is that the reason others on wall street don't pour money in, is ESL and Berkowitz have it all locked up. Theres not enough pie left for GS, BOA, BH etc to go after it and make it worth their while. When the stores rebound, and they will, those two will make a ton. A handful of sears employees will do ok and most of you all will still be bitter complaining on here how Eddie robbed you.... BWAHAHAHAAHAH

If you have any savings left I suggest you all buy as much SHLD stock as you can get your hands on, but most of you are too dumb...

Ok, lesson over, go back to your b--ching and whining.

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Steve muchkin is eddies favorite little person. They have been tied together since college when he was and still is the wizard of oz. He taught him all his secrets and then some. They must be laughing at us stupid nasty store employees. What a bunch of stupid people to work for us and try and make it right when the business model was not transformed at all. Let's sow our seeds. How about lock eddie up with shady business practices etc. I know it will never happen. I wish eddie all the luck in world. At least he has cleaning supplies and tp in his mansion and yacht while we have to pay for our own in our dilapidated store. Too much of an expense. Ebita eddie.

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. EBITDA, EBITDA, EBITDA. You do understand that SHC fixation on EBITDA is the least valuable metric to judge a companies viability by, right? His assest light plan is to get rid of all the stores. And when you buy a companies debt, like Eddie has, it makes you first in line when the company goes BK. He knows what he is doing but what he is not doing is trying to keep the retail stores alive.

Please read and understand how hedge funds work and make money. They (hedge funds) are the reason for so many retail companies going BK. They buy up the shares, put the company in massive debt to fund other projects (think Seritage) and then walk away with what assets are left.

And I guess that every other financial person on the planet is stupid for not seeing what Eddie is seeing. They aren't investing because they understand it is a losing game

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It is always sad to see Eddie defenders pop up here. Why do you keep doing it? Is it because you are a higher up and you don't want to lose your cushy job? Or are you one of those idiots that bought a bunch of stock in hopes for a big sell off if it goes up a couple of dollars?

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Good article. Source is />

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If no one is willing to invest in SHLD when the stock market is overflowing with money tells me investors see SHLD as a no win situation or thay see E.L as a someone thay don't what to deal with. For me Anything Sears and Kmart is tainted by eddy.

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- EBITDA is financial malarkey. EBITDA is not a financial measure recognized in generally accepted accounting principles (GAAP). Because EBITDA (and its variations) are not measures generally accepted under U.S. GAAP, the U.S. Securities and Exchange Commission requires that companies registering securities with it (and when filing its periodic reports) reconcile EBITDA to net income in order to avoid misleading investors.

Your screed on Saint Eddie and his transformation is pure malarkey as well!

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Eddie Lampert is doing his best to transform Sears, maybe you don't realize it but he owns more than 50% of all the shares (and a lot of warrants that will be worth 0$ if the company goes bankrupt), so your theory doesn't make any sense.

He could have closed all the stores years ago and profit from the real estate but he didn't because he is transforming the company preserving as many jobs as possible into a more asset light business.

You say he makes the company pays double-digit interest rates on the loans he gave.Actually it's 11%.

Maybe you don't know but SHLD bonds are traded on open markets with a huge discount because NOBODY wants to buy them and take the risk.So if it was really a good opportunity to make easy money why do they trade so low and still nobody buy them?

He is supporting the company lending it money, of course nothing is free when you take a huge risk lending money.But the interest rate he takes are simply what it's worth given the real risk.

Also he is the majority owner and makes the decisions, he doesn't have any interest in making the company bankrupt.He will profit a lot more when adjusted EBITDA become positive and the stock price increase.

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i think he was trying to wind things down in 2007-08 when the real estate bubble burst. All the properties he thought had value were now worth a lot less. He had to take the last decade to let the real estate market get back but in that time retail started to tank and SHC debt sky rocketed and revenues fell. Now I feel he is just trying to get what he can.

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This is true however it appears things didn't exactly go as planned. His hedge fund had lost billions. It's a shadow of its former self. There's no doubt Eddie will gain from the bankruptcy. However...the investment of money as well as the investment of the decades of his life couldn't be made up for by profits gained from the bankruptcy.

Personally I believe he planned to come out big from this deal but it was harder than he expected.

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Actually, Eddie bought all of the Kmart debt and when they went BK he took that money and real estate and bought Sears. Other than that, spot on.

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A very good summary, and answer to people who don't understand why Eddie wants the company to go toes-up

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Pretty much what I've been saying, but thanks for reminding folks of it. :)

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