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Strategies & Market Trends : BAK - Investing

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To: indigostretch who wrote (430)	3/3/2012 5:29:19 PM
From: Spin.	1 Recommendation Read Replies (1) of 3249

He argues in his SA article leases and RE are written up to fair market value which is only partially correct: 1/ The 170MM in SHLD CN leases just sold are carried at zero on the books. (~100 more leased stores though not as good as Eaton stores @ $0 on the books) 2/ The US gross leases @Fy2011 were 450MM with 226MM amortization = 224MM Net written up favorable lease value but Ala Moana lease alone sold for 250MM (still ~250 more leased mall stores on the book + ~1100 leases Kmart stores) 3/ Kmart RE and Leases wearn't written up. ~1100 Kmart leases carried at $0, and ~170 owned stores at 315MM. So bull case is More RE undervalued RE/Leases Eddie can continue to peel off; b) Spinout of more subs such as Lands' End to preserve value to current shareholders; c) Continuing to repurpose business to High ROIC Internet and Hometown. IBKR was lending my shares out for ~88% rebate of which I got 50% of that. I don't know how shorts make money on this one. I wouldn't bet against Eddie, I probably sold too cheap. Spin

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