Wall Street went into retreat Monday as investors recalculated what President Donald Trump will be able to do supercharge businesses after the long-promised bid to remake the healthcare system and ditch Obamacare went down in flames.
But even as the Dow Jones Industrial Average fell, troubled retailer Sears Holding Corp. lived up to the contrarian impulses of its chief executive officer, Edward Lampert, and shot up 10.6 percent to $9.40.
Sears recently warned that it might not be able to continue as a going concern, rattling many investors but apparently not Lampert, the architect of the modern Sears and largest shareholder, or the stock’s second-biggest holder, Bruce Berkowitz.
According to regulatory filings, Lampert last week spent $4.2 million acquiring another 525,936 shares in the retailer, boosting the number of shares he controls directly to 31.8 million.
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Likewise, Berkowitz’s Fairholme Capital Management acquired 613,900 Sears shares for $5 million last week, bringing the number of shares beneficially owned by Berkowitz to 28,557,148.
It’s not clear where Monday’s boost in buying came from, but the two might be building their investments in the retailer.
Berkowitz is on the Sears board and has pushed for the company to become profitable as it evolves to a more asset-lite model focused on the web. But so far the investment has not played out as he expected.
Berkowitz, in his annual letter in January to his shareholders in his fund, said: “Focusing on tangible assets has served us over many years, but most believe Sears to be the exception to the rule. Disruptive technologies; near-zero cost of capital; and few, if any, legacy obligations provide young competitors with great advantages over old-line operators.”
Not every retailer was so luck to miss out on Monday morning’s rout.
Among the decliners were G-III Apparel Group Ltd., 13.4 percent to $19.86, which fell as earnings declined; Vince Holding Corp., 3 percent to $1.60; Ross Stores Inc., 1.1 percent to $65.41 and Nike Inc., 0.6 percent to $56.
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