Why Sears Holding Corp. Stock Dropped Today

MarketsMotley Fool

What happened

Shares of Sears Holding Corp. (NASDAQ: SHLD) were heading lower today, falling 7.6% as of 2:29 p.m. EDT, even though there was no company-specific news out during the day.

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So what

Sears stock hit a 52-week low today, with its market value dropping below $200 million as the market continues to fear its likely bankruptcy. In recent weeks, the company has announced layoffs at its corporate headquarters and has continued to close stores in an effort to stay afloat. However, considering that mall vacancy rates continue to increase, the landscape for department stores in general and Sears in particular remains challenging.

As my colleague Adam Levine-Weinberg pointed out, due to upcoming debt maturities, it would be virtually impossible for Sears to survive past 2020, though it could be forced to shut its doors even sooner.

Now what

Sears stock has been declining steadily for the last three years so it's not surprising to see the company hitting another modern-era low. It also remains a popular short, with 48% of the float sold short, meaning investors are betting that it will fall.

Retail earnings season is right around the corner, but there's little reason to expect a turnaround at Sears as analysts see revenue falling by a third again on a double-digit drop in comparable sales.

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Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.