Comments on: Eddie Lampert Distributes Shares of SHLD, AZO, and AN http://streetcapitalist.com/2010/01/14/eddie-lampert-distributes-shares-of-shld-azo-and-an/ Wisdom on such diverse topics as: spin-offs, merger arbitrage, post-bankruptcy equities, global macro commentary and short ideas. Thu, 10 Feb 2011 04:28:00 +0000 hourly 1 http://wordpress.org/?v=3.2 By: gulicious http://streetcapitalist.com/2010/01/14/eddie-lampert-distributes-shares-of-shld-azo-and-an/comment-page-1/#comment-4924 gulicious Sun, 17 Jan 2010 12:05:31 +0000 http://streetcapitalist.com/?p=852#comment-4924 Is this a normal occurrence? I saw these transactions posted on Yahoo finance tonight and wondered what it all meant. Threre is a close connection between the three companies and I just don't know what to do... I am an owner of SHLD for some time and have done very well. I don't know if this even matters to my investment thesis but overall, I would have heard more chatter about the transaction which happened on the 11th. Certainly this stock is followed in larger droves - I didn't even see conspiracy theorists amok. Let us know in a future post what you believe the motivations may be or where it can lead. Thanks. Is this a normal occurrence? I saw these transactions posted on Yahoo finance tonight and wondered what it all meant. Threre is a close connection between the three companies and I just don't know what to do… I am an owner of SHLD for some time and have done very well. I don't know if this even matters to my investment thesis but overall, I would have heard more chatter about the transaction which happened on the 11th. Certainly this stock is followed in larger droves – I didn't even see conspiracy theorists amok. Let us know in a future post what you believe the motivations may be or where it can lead. Thanks.

]]> By: sclarksons http://streetcapitalist.com/2010/01/14/eddie-lampert-distributes-shares-of-shld-azo-and-an/comment-page-1/#comment-4918 sclarksons Fri, 15 Jan 2010 09:41:05 +0000 http://streetcapitalist.com/?p=852#comment-4918 If you read all the filings, it actually appears that at least some of the shares were transferred from the partners into entities that lampert controls.<br>(this is with regard to SHLD, I haven't read the others, though they seemed the same at a glance)<br>In the latest filing, there are also about 70,000 fewer total SHLD shares accounted for than were on the last 13-hf, so perhaps someone withdrew from the fund after the year end, and (speculating this) Lampert took his pay for the year in shares for the rest.<br><br>It also says this in the filing:<br>"As a result of these distributions, Mr. Lampert directly holds Shares in which he previously had an indirect interest. The distributions did not change Mr. Lampert's overall pecuniary interest in securities of Sears Holdings Corporation."<br><br>Last year or the year before (time flies in a crisis) there was a form 4 filing that resulted in an "increased pecuniary interest." but that was in the summer I believe (at around $135, so it must have been two years ago.) <br><br>If you work under the assumption that Lampert wants out of the hedge fund biz, and into the holding company management biz (which is one possible scenario to be sure) then I suspect that he does not PERSONALLY own enough shares to control the entity after wrapping up the hedge fund.<br>-forbes estimated his net worth at less than 4B a couple of years ago I think, and that was when the sears position was over 10 B, so figure he might personally own 20-25% of the 65 million shares at ESL, or around 15-20%. Lots, to be sure, but not enough to cash out now.<br><br>thus, continued buybacks at the holding company, and slow distributions could ultimately result in personal control...<br>either way, I think the stock is still a reasonable value at 12B, 15B EV, with 1.7 B in cash flow and obsessively shareholder focused management, a 35 million share float, and 14 million short interest on top of that. at $100 dollars, that's a 1.4 billion short position, on top of 3.5 billion publicly traded stock. Look out above! If you read all the filings, it actually appears that at least some of the shares were transferred from the partners into entities that lampert controls.
(this is with regard to SHLD, I haven't read the others, though they seemed the same at a glance)
In the latest filing, there are also about 70,000 fewer total SHLD shares accounted for than were on the last 13-hf, so perhaps someone withdrew from the fund after the year end, and (speculating this) Lampert took his pay for the year in shares for the rest.

It also says this in the filing:
“As a result of these distributions, Mr. Lampert directly holds Shares in which he previously had an indirect interest. The distributions did not change Mr. Lampert's overall pecuniary interest in securities of Sears Holdings Corporation.”

Last year or the year before (time flies in a crisis) there was a form 4 filing that resulted in an “increased pecuniary interest.” but that was in the summer I believe (at around $135, so it must have been two years ago.)

If you work under the assumption that Lampert wants out of the hedge fund biz, and into the holding company management biz (which is one possible scenario to be sure) then I suspect that he does not PERSONALLY own enough shares to control the entity after wrapping up the hedge fund.
-forbes estimated his net worth at less than 4B a couple of years ago I think, and that was when the sears position was over 10 B, so figure he might personally own 20-25% of the 65 million shares at ESL, or around 15-20%. Lots, to be sure, but not enough to cash out now.

thus, continued buybacks at the holding company, and slow distributions could ultimately result in personal control…
either way, I think the stock is still a reasonable value at 12B, 15B EV, with 1.7 B in cash flow and obsessively shareholder focused management, a 35 million share float, and 14 million short interest on top of that. at $100 dollars, that's a 1.4 billion short position, on top of 3.5 billion publicly traded stock. Look out above!

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