Summary
Although Mr. Nelson has correctly restated the Barron's article, he misses the most important incorrect assumption The Barron's writer has used to make his argument. He states that "Mr. Lampert must invest in order to turn Sears around". As a battle scared veteran of both the Federated bankruptcy and the Ward's fiasco, I am probable the best qualified person around to tell Mr. Nelson that his "comparable" are simply incorrect. For one thing it will take more than money to turn SHLD around. If all it took was money, Sears would not have been circling the drain and available for purchase by Mr. Lampert . IT TAKES RETAIL ACUMEN TO TURN RETAILERS AROUND! If you examine the JCP and FDS (now M) stories you will see that they had some of the best and brightest merchants and retailer minds leading the turnaround.
Analysis
Of equal importance is the fact that Mr. Nelson did not address the major thrust of the Barron's article having to do with the monetizing of the SHLD real estate portfolio.
I understand that during a recent conference call with analysts, Mr. Ackman, the latest member of the "Eddie Lampert as the second coming of Warren Buffet" fan club, a figure of $20 billion was assigned to the SHLD portfolio. I have seen estimates ranging from $5 to $10 billion but this is breaking new ground. By failing to debunk this ridiculous number, Mr. Nelson inadvertently is perpetuating the notion that the Barron's article is only slightly wrong rather that completely wrong and misleading. The real estate value, for reasons too numerous to go into in this article, is actually closer to $1.5 billion as estimated by regional mall industry executives.
