Business

Amazon (AMZN) Comes to Aid of Sears Holdings Corp (NASDAQ:SHLD)

Sears Holdings Corp (NASDAQ:SHLD)

Struggling Sears Holdings Corp (NASDAQ:SHLD) shares popped today after the iconic retailer announced that its Kenmore appliance line will be available through Amazon.com. The market responded to the news by sending SHLD shares gapping up to open at $10.41 from their $9.78 close on Wednesday. Volumes have been heavy – around 10 times their normal 30-day, daily average.

Sears Holdings Corp (NASDAQ:SHLD)
30-day daily $SHLD Candle Bar Graph

Sears was once the most recognized retail store in America but that luster has lost its shine. Other retailers, such as WalMart and Target, surpassed Sears and never really looked back. However as recently as 201, SHLD shares traded above $80. The slide in share price from those levels over the past few years was due to the loss of sales to other brick and mortar retailers and online websites.

Sales topped $39 billion in 2013, but by 2016 the number shrank to $25 billion. In response, Sears Holdings Corp (NASDAQ:SHLD) cut expenses and sold off assets. That helped some accounting ratios, and gave needed financial relief, but sacrificed potential future market share. SHLD now trades under $10. In

In June, Sears Holdings Corp (NASDAQ:SHLD) traded between $6 and $7. Since then, SHLD shares have traded up over 35% for the past month. However, a sizeable short-selling position of around 20% of the share’s float is still betting on the company hitting headwinds that will send the stock lower.

The Amazon deal could pump new revenues, and life, into Sears Holdings Corp (NASDAQ:SHLD). Charlie Kindel, Director of Alexa Smart Home stated “We’re excited that Kenmore has added Alexa functionality to these products and we think customers will love the convenience of cooling their home, starting their laundry, and more, using only their voice. Working with Amazon is perfectly aligned with our omni-channel strategy to unleash the power and service of Kenmore and support the brand’s growth,” said Tom Park, President of Kenmore, Craftsman and DieHard brands at Sears Holdings. “This collaboration is the first of its kind for Kenmore, broadening its accessibility to the next generation of American families outside of Sears branded retail channels.”

I have no positions in any of the stocks mentioned, and have no plans to initiate any positions within the next 72 hours. All information, including any data, is provided without any guarantees of accuracy.

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About the author: James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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James Marion is a University of Houston student studying Business with a concentration in Finance. James has interned with several investment professionals and hopes to pursue a career as a professional stock analyst after graduation.

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