Shares of Sears Holding Corp (NASDAQ: SHLD) were tumbling for the third day in a row today as concerns about the company's plan to stave off bankruptcy continued to mount. The stock also fell below $1, jeopardizing its listing on the Nasdaq. Though there was no specific news out on Sears today, investors sent the stock lower once again. Shares closed down 16.4%, marking the seventh straight day it has traded lower, following a 10% drop on Thursday and a 4% sell-off last Friday.
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Last Monday, Sears shares started falling when the company said that CEO Eddie Lampert's hedge fund, ESL Investments, had made a number of proposals for the company, including restructuring $1.1 billion and selling $1.5 billion in real estate holdings and $1.75 billion in other assets, including Sears Home Services and the Kenmore appliance brand.
Since then, Sears stock has fallen by more than a third as it's become clear that the company is fast approaching. Now that the share price is under $1, investors are also concerned that the stock could be delisted from the Nasdaq. According to Nasdaq rules, if Sears trades 30 consecutive days under $1, then it has 180 days to get back in compliance with exchange rules. If not, it will be delisted.
Sears' comparable sales improved in its most recent earnings report, falling 4%, better than a double-digit drop that had become the norm, but the company's massive losses continued. Even after closing hundreds of unprofitable stores, the company's chances at a legitimate turnaround appear to be almost zero. At this point, Sears' best move is probably taking up Lampert on his offer, selling off those assets, and restructuring its debt. With a $134 million debt payment coming Oct. 15, the retailer will have to move quickly. It had $193 million in cash as of August 4, but the third quarter is generally a heavy spending period in retail as businesses stock up for the holidays.
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