Sears Shares Jumping on Speculation (SHLD, WMT, TGT)

After diving by -8.5% in one day in late December, Sears Holdings Corp. (NASDAQ: SHLD) has reversed that loss on speculation that the venerable retailer will be taken private. Sears has steadily lost customers to other big-box retailers like Wal-Mart Stores Inc. (NYSE: WMT) and Target Corp. (NYSE: TGT) over the years and none of its turnaround plans has had much effect.

A report in the San Francisco Chronicle notes that it is easier for a privately held company to reorganize and restructure than one that is publicly held.

Sears really has two choices, neither very good. First, it can sell off some or all of its remaining brands like Die Hard batteries, Craftsman tools, and Kenmore appliances. Or it can try to unload its old buildings and the real estate underneath them.

The second is probably the preferred choice from Sears’ point of view, but buyers could be hard to find. Getting rid of the company’s remaining brands would leave a hollowed out shell that would resemble nothing so much as a real estate trust.