Why Sears Holdings Stock Surged Today – The Motley Fool

What happened

Shares of Sears Holdings (NASDAQOTH: SHLDQ) skyrocketed today after Chairman Eddie Lampert offered a rescue plan over the weekend to save the bankrupt retailer. Sears also said it will close 80 stores by late March 2019 now that the holiday season has passed. The stock jumped 58.6% to $ 0.27 a share

Lampert, the hedge fund tycoon who was at the helm through a merger with Kmart in 2005 and the financial crisis, put together at $ 4.4 trillion offering, which includes taking over 425 stores and offering a $ 1.3 billion loan to help turn around the business. The plan would need to gain approval from creditors and the bankruptcy court, but it is easy to see why the stock is spiking on the news.

Image source: Sears.

Lampert and his hedge fund, ESL Investments, which is the retailer's biggest shareholder and creditors, have been worried about a way to take Sears private in recent months, and Lampert has maintained that a slimmed-down Sears would be profitable if money-losing stores were closed

Now what

Sears also received a combined bid from liquidation is Tiger Capital and Great American Group, indicating a potential bidding was for Sears assets as well as interest from multiple parties. That could push the stock even higher, but shares will continue to be volatile as Sears' advisors will determine by Friday if any bids are qualified to be auctioned for mid-January.

Expect the stock to swing one way or the other on Jan. 4, when investors will receive the decision on the buyout bids and we will see if this will become another chapter in Sears' long history.