From the article: “Is Edward S. Lampert ready to make another run at Sears Canada?

Sears Holdings, the giant retailer controlled by Mr. Lampert’s hedge fund, ESL Investments, bought 400,000 shares of Sears Canada on Monday, people with knowledge of the transaction told DealBook.

Add that to stock purchases made in December and early March, totaling 60,000 shares, and Sears now owns about 74 percent of its Canadian counterpart.

So what’s Mr. Lampert up to? He won’t say, and a spokesman declined to comment. But analysts and investors believe Sears could soon try to buy the remaining shares of Sears Canada that it doesn’t already own.”

Lampert Goes Shopping for Sears Canada Stock - nytimes.com

Even for a billionaire hedge-fund titan, losing $30 million an hour has got to be a bummer.

That’s what Eddie Lampert, the chairman of Sears Holdings, has experienced with just his nine largest holdings since Sept. 19 - over just 26 trading days.

His massive holdings in Sears Holding, the parent of Sears and Kmart stores, and in AutoZone, AutoNation, Citigroup and five other companies have lost $5 billion in value over that time, based on the size of the holdings as of June 30, according to his 13F filing with the Securities and Exchange Commission.

LAMPERT’S A HUGE LOSER: $30M/HOUR - nypost.com

This Amendment No. 12 to Schedule 13D (this “Amendment”) relates to shares of common stock, par value $0.01 per share (“Holdings Common Stock”), of Sears Holdings Corporation (“Holdings”). This Amendment No. 12 supplementally amends the Statement on Schedule 13D, as amended, filed by the Reporting Persons (as defined below) by furnishing the information set forth below. Unless set forth below, all previous Items are unchanged. Capitalized terms used herein which are not defined herein have the meanings given to them in the Schedule 13D, as amended, previously filed with the Securities and Exchange Commission.

Based on the most recently disclosed number of outstanding shares of Holdings Common Stock, the Reporting Persons are filing this Amendment to report an increase in their respective current beneficial ownership percentages of Holdings Common Stock, which for certain of the Reporting Persons is 51.9%, resulting from a decrease in the number of outstanding shares of Holdings Common Stock.
Edgar Filing - sec.gov

From Sears last earnings release:

“The Company also announced today that our Board of Directors has approved the repurchase of up to an additional $500 million of the Company’s common shares. This authorization, when added to the $143 million remaining as of May 3, 2008 under previous authorizations, provides us with a current aggregate authorization of $643 million.

From Autozone’s press release:

“AutoZone, Inc. today announced that its Board of Directors has authorized the repurchase of an additional $500 million of the Company’s stock, bringing its current unused repurchase authorization to $608 million. Including the additional authorization, the cumulative share repurchase authorization approved by its Board since 1998 totals $6.4 billion.”

The agreement with ESL or certain of its provisions will terminate, except as the parties otherwise mutually agree, upon the earlier of the date upon which the shares (a) owned by ESL constitute less than 25% of the then outstanding shares or (b) owned by ESL constitute more than 50% of the then outstanding shares, provided that ESL has acquired subsequent to the date of the agreement additional shares representing above 10% of the then outstanding shares.

Autozone language: “owned by ESL constitute more than 50% of the then outstanding shares”

Sears current stake: 49.7215%

Auto Nation: 40% ($180M to achieve 50% stake)

Will ESL declare majority ownership in Sears, Auto Zone and Auto Nation at the same time?

From the notes: “24. An attendee asked about asset allocation advice. Bruce responded , “Asset Allocation? What’s that? It’s a bad word. If you mention it in my office you get fired. Next week will you ask me about efficient market theory and beta?”

Talk about a true value investor. Great find!!!

Notes from AAII NYC discussion with Bruce Berkowitz of Fairlholme Fund - fool.com

June 5, 2008 Notes from AAII NYC discussion with Bruce Berkowitz of Fairlholme Fund - gurufocus.com

From Fairholme’s latest 13-F:

SEARS HOLDING CLL OPT 80.0000 OPTIONS - CALL 812350106 39981 354000.00CALL SOLE

Unless Mr.Berkowitz closed out the contracts, my guess is he purchased Jan 2010 call contracts. The current open interest is 3,662 so it looks like Bruce will add to his stake at some point in the future. Why $80 call contracts as opposed to deep in the money options? The current Book Value Per Share on the Balance Sheet is 80.810 so the $80 contracts provide a conservative margin of safety for SHLD shares.

From the article: “Speaking by phone from the company’s Hoffman Estates, Ill., headquarters, Mr. Lampert bristled at critics who lost faith in Sears as its share price fell from $195 in April 2007 to about $104 now. Sears Holdings was formed in 2005 when Kmart Corp. merged with Sears, Roebuck & Co. and took the Sears name. The stock’s performance since Kmart emerged from bankruptcy in May 2003 is a healthy 900% gain. “Instead of [the share price] being up 20 times since we took control of Kmart in 2003, it’s up 10 times. The decline from our highs is in line with other department store retailers.”

Other large, complex businesses have successfully adopted the business-portfolio model. He compares Sears with Warren Buffett’s Berkshire Hathaway Inc., in which managers are given a long leash to run businesses, and Mr. Buffett doesn’t get involved in their day-to-day operations. He also says Sears can be rebuilt with a strong management culture, similar to General Electric Co., and Procter & Gamble Inc.

Mr. Lampert is dealing with heavy personal losses from Sears’s recent stumbles. He’s told investors in his ESL Investments Inc. that his entire net wealth is tied up in the hedge fund, except for personal real estate.

We have already mentioned how Sears decline is inline with other retailers regardles of sales performance.

Lampert Admits Flubs,Sees Sears Turnaround - wsj.com

From the article: “Sears Holdings Corporation said today its board of directors appointed W. Bruce Johnson, executive vice president, supply chain and operations, to the additional role of interim chief executive officer and president. Mr. Johnson will replace Aylwin B. Lewis, currently president and chief executive officer, who will leave the company as of February 2, 2008, at the end of the company’s fiscal year. Mr. Lewis will also step down from the Sears Holdings board of directors at that time. Sears will immediately commence a formal search to identify a permanent chief executive officer.”

Sears Holdings Names W. Bruce Johnson Interim CEO - yahoo.com