S&P chose to oust Sears because of its small public float. The vast majority of the company is controlled by either Eddie Lampert and his hedge fund, ESL Investments, or Bruce Berkowitz’s Fairholme investment firm. Together, the two men control more than 90% of the company.
Sears stressed that the departure is because of the float, not the stock’s performance. The stock has been one of the index’s top performers this year, rising nearly 70% this year. Much of the rise, though, came from speculation that Lampert would take the company private or liquidate its remaining holdings.
To be sure, Sears is struggling. Sales of some assets have strengthened its balance sheet, but sales have rapidly deteriorated. It did manage to narrow last quarter’s loss. It booked a loss of $132 million, $1.25 a share, down from $146 million, $1.37 a share, a year ago.
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