Thursday, January 12, 2012

Sears new brand: stock shorting and dissolving locations

Sears holdings received another death knell blow this morning when Cit Group made the decision to stop financing loans to suppliers, which are a vital part of their payables accounting practice.

And here, as there, we expect shorting to death to commence in 5...4...3..." Subsequently, when the company was downgraded to triple hooks S&P we said that "Accounts Receivable about to become one big perpetition charge off", the implication naturally being that the company is about to lose its vendor financing - which for retailers is the last step before outright default. Sure enough, the WSJ reports that this is precisely what happened. "Struggling Sears Holdings Corp. suffered another setback when a large lender said it would no longer finance loans to suppliers awaiting payment from the company. - Zerohedge

For those who can remember, something similar took place between General Motors, and one of their primary distributors Delphi just before the automobile's bankruptcy.


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