A Sears investor will be urging the embattled department store chain to consider going private, among some other strategic alternatives.
Memento S.A., a Switzerland-based investment manager for the Elarof Trust, which owns about 2 millions shares in Sears, issued an open letter to the company Thursday morning, expressing concerns over “historical patterns of alarming short-selling activity” within the stock.
Sears shares were up more than 8 percent Thursday morning on the news.
Memento said This kind of wants to ensure Sears’ management team will be taking action to “curb” future short-selling activity.
“We have invested in Sears because of our belief within the long-term value of its vast national network of over 1,100 Sears as well as Kmart retail stores across the United States, the strength of its well-established proprietary brands, its position as the nation’s leading provider of appliance as well as product repair services, as well as its insurance subsidiary,” Alessandro Mauceri, the CEO of the firm, wrote.
To be sure, Mauceri added: “The market has indicated in which more short positions exist within the market than SHLD shares available to borrow, as shown by the unusually high volume of short-selling activity relative to the Company’s real available float of outstanding shares.”
A representative through Sears didn’t immediately respond to CNBC’s request for comment.
Memento will be urging Sears to form a board to look after shareholders, to temporarily suspend short-selling in Sears’ stock, as well as to evaluate strategic alternatives in which include going private.
To be sure, going private in This kind of market will be exceedingly tough, as well as Sears will be already heavily leveraged. Even Nordstrom has put its plans to go private on hold until after the brand-new Year.
Mauceri said short interest in Sears shares has fluctuated between 12 million to 19 million shares just within the past two years.
Sears’ stock has fallen roughly 50 percent This kind of year.