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To: Paul Shread who wrote (74368)	5/22/2003 2:47:06 PM
From: ajtj99	Respond to of 209892

Funny you should ask. A friend of mine owns a store fixture liquidation company. When a retail chain closes stores or goes bankrupt, they are almost always the ones who buy the store fixtures. They just finished up with AMES, for example. This guy handled all the Builders Square/Hechinger closings previously, and is very up on what's going on inside K-Mart. We spoke last week, and I asked him about K-Mart. I said I could not believe they emerged from Chapter 11 after losing $1/2-Billion in the 1st quarter. I said from where I stood, they appeared ripe for liquidation in Jan. 2004. He said he was at their headquarters about 3-1/2 months ago for a meeting, and the talk then was that they were going to emerge from Chap 11 so the consultants could all get their bonuses (for a successful turnaround), then they were going to take it right back into Chapter 11 again and liquidate. I mentioned to him that this whole deal smelled of a convertible preferred, as the guy who owns 50% of KMRT was a bond owner, and he was very anxious to get out of Chap 11. I would need to check the SEC filings, but if he's not shorting this stock into oblivion through some offshore account he's a dumb guy. To make a long story short, KMRT is a dead retailer walking that's being milked dry while it's still alive. Will your world be any different without them? No. Will anyone miss them? No. Are they relevant? No. Therefore, they will die. Stay away. I know retail.

To: Paul Shread who wrote (74368)	5/23/2003 10:40:10 AM
From: reaper	Respond to of 209892

i didn't even know they were out of BK. that said, this smells like it might be one of those serial bankruptcy candidates. the fact that they closed a bunch of stores does not change the issue that WalMart, Kohls, Target and others are just KILLING them. also, most of the stock is probably in the hand of prior debt / bond holders. these guys are likely to be sellers for a LONGGG time, which would tend to put a lid on any price appreciation even if the business is a little better. Cheers

To: Paul Shread who wrote (74368)	5/23/2003 10:49:00 AM
From: reaper	Read Replies (3) \| Respond to of 209892

Paul -- on KMart. let me ammend my prior reply. most of the shares are now owned by ESL (Edward Lampert) and Third Avenue Value. these are REALLY smart guys and deep value players. and Lampert knows retail. they surely bought the KMart debt at a huge discount with the intention of getting common in the re-organization. that makes them more likely to be "holders" rather than sellers. that said, some leg work is likely required to figure out what their cost basis is. also note that later this summer unpaid vendors are due to get something like 25mm shares. THESE folks are highly unlikely to hold onto their stock (if you are an apparrel manufacturer and KMart owes you a bunch of money, and you get stock instead of cash, what are you going to do; sell the stock for what you can get for it). i've invested in a lot of re-organized companies over the course of my life (and they have provided some of my best returns). i have found that you're best off waiting a year or so after the company emerges from bankruptcy before you make a decision. this gives you time to observe several quarters of financial results, and the stocks rarely go anywhere due to the afore-mentioned over-hang of former creditors who get stock and just want to sell out at any price. Cheers