WASHINGTON, January 10, 2017 – President Trump’s positive message Thursday to airline execs touting his upcoming, TBA, “phenomenal” tax plan, kicked U.S. stock markets into high gear Thursday, leading to a reignited Wall Street rally that’s carrying over into Friday trading. As of 1:20 ET, the Dow is up 104.62 at 20,277.02; the broader based S&P 500 is up 8.40 to stand at 2,316.27, and the tech-heavy NASDAQ is winning as well, up 20.40 at 5,735.58.
Even oil, which has been wobbly of late, has caught a bid again today.
On the flip side, individual stocks win and lose. One winner: Sears Holdings Corp. (symbol: SHLD), up a whopping 30.69 percent and currently trading around $7.24 per share. The reason: the company’s announcement of yet another reshuffle/reorg plan for its fast-fading Sears and K-Mart stores.
The substantial jump in SHLD share price for this fast-fading onetime king of department store, retail and catalog sales thrilled current holders, most of whom will likely bail, however, on this brief gift. That’s because SHLD is actually one of those companies where you can say with impunity, “Stick a fork in it, it’s done.”
Having botched, mismanaged, and otherwise destroyed what value was left in this onetime retail giant, SHLD’s “brilliant” CEO, hedge fund and trading genius Eddie Lampert has run it into the ground over many years, having (we think) originally bought Sears and consolidated it with K-Mart in order to take advantage of the value of the holding company’s prime real estate—only to run into the buzz saw of 2007-2010.
Never bothering to do anything dramatic to the chain’s dismal stores as he waited for the hot real estate market to make him profitable beyond avarice as he sold off the properties, Lampert was left with decaying stores, no retail strategy and no real estate value. Lately, he’s been raising cash by selling off Sears’ still valuable assets, most recently, its revered Craftsman line of tools.
Likely, Kenmore appliances (mostly manufactured to Sears specs by Whirlpool anyway) will be the next brand to go. Pretty soon there will be nothing left. Brilliant.
So actually, our categorizing Sears Holdings as a winner was sort of misleading, and we don’t want to be accused of providing “fake news” in the current political climate. So let’s rephrase that: Sears Holdings a big winner today, yes. But over time, it’s almost certainly a goner, given its one-way trajectory of doom.
Today’s real loser is hapless social networker Twitter (TWTR). This one’s been sinking seemingly forever since not too long after its IPO a few years back. We were actually lucky enough to get a few shares of this IPO back in the day, but traded it away for a healthy profit a few months after acquiring the stock, as it seemed to be a flash in the pan.
It was, although investors are still hanging on, now hoping for a buyout that doesn’t seem to be materializing. After reporting lousy earnings (again) on Thursday, TWTR shares are sitting at 15.55, off another 5.24 percent after getting hammered Thursday as well.
As we noted in our Thursday article, among other things, TWTR is suffering under a distracted CEO who’s splitting his time as CEO of another wobbly tech entry, the payment collection and processing company known as Square (SQ), whose performance, unsurprisingly, has been anemic.
Twitter, on the other hand, has never actually made a profit. That’s not entirely unusual in the growth-crazed tech universe of stocks. But the fact that TWTR has never figured out exactly how to get profitable is much more of a concern. Even with President Trump generating tons of interest on the platform nearly each and every day, Twitter’s advertising model, such as it is, is simply not generating the earnings of, say, Facebook (FB), which is eating TWTR’s corporate lunch.
Indeed, Twitter is losing its glitter and the stock currently seems like a one-way train to oblivion. Famous American philosopher Yogi Berra once observed that “It ain’t over ‘til it’s over.” But that said, Twitter’s shares look like they’ll be over before the platform is over, which is very confusing to investors, all things considered.
Until and unless this company shows some signs of life and perhaps a hint of profitability before the next presidential election, it’s probably best to sit this inning out rather than speculating on shares that seem ready to bleed out.