SHLD...Updated "Short" Math

29 Aug 7:52am
Posted by ToddSullivan
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Some updated Short Math...

Holder Name---Shares---%

ESL Investments, Inc.---65,639,184---51.0%
Fairholme Capital Management LLC---16,110,090---12.5%
Legg Mason Capital Management, Inc.---12,503,168---9.7%
Pershing Square Capital Management---6,746,568---5.2%
ClearBridge Advisors---4,789,523---3.7%
Perry Capital---2,694,95---22.1%
Davis Advisors---2,020,96---11.6%
Dalal Street, Inc.---517,608---0.4%
T2 Partners Management LP---50,625---0.0%
Greenlight Capital, Inc.---11,240---0.0%

Total held by above---111,083,919---86.2%

Total Outstanding---128,800,000

Short Interest---33,656,888---26.1%
Share Not held by Above Holders---17,716,081---13.8%



Here is why I added some shareholders to the list.

ClearBridge Advisors is actually owned by Legg Mason and considering Bill Miller's influence at the entire firm I wouldn't think it is crazy for the ClearBridge PMs and analysts to be communicating with or with directly with Bill Miller and his team.

Perry Capital is a no brainer to be added to the list as Rchard Perry is actually on the Board of Directors at SHLD. One other interesting tidbit is that Richard Perry worked on the Arb desk at Goldman during the Robert Rubin years (according to this months Fortune magazine). This is te same desk that Eddie Lampert worked on.


Dalal Street (Mohnish Pabrai), Davis Advisors, Greenlight (David Einhorn) and T2 (Whitney Tilson) are all well known for being value guys who will hold onto positions for extended periods as long as the position is trading sufficiently below intrinsic value. Einhorn, Tilson and Pabrai will all be presenting at the upcoming Value Investor Congress.

So over 86% of the shares outstanding are being held by long-term value investors which is really a great sign. The shares sold short is almost double the number of shares that we estimate are in the trading float...but the real question is does it really matter? If the long-term holders listed above hold their shares in a margin account, then those shares can be borrowed and shorted. So the answer to the question really is no. However if all these holders were to move their holdings to the cash account or requested their share not be lent out then that would create a situation where the maximum number of shares that could be borrowed at approximately 17.7mm.





Disclosure ("none" means no position): Long-SHLD
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About

ToddSullivan

A Massachusetts based value investor, I look for companies whose current valuation is at a discount to their true value. When I purchase a stock, my typical holding period is several years. I consider buying a stock purchasing a piece of a business. I am confident once I make a decision to buy that eventually the market as a whole will recognize the true value of the business and value it accordingly. It may take 1 month, 6 months or a year, but if I buy it at enough of a discount to its true value my results will be (and have been) superior to the market as a whole. Of all the disparate investing disciplines, value investing has stood the test of time. The great investors of have all been value investors. Warren Buffett, Ben Graham, Bill Ruane (Sequoia Fund), Bill Miller and Wally Weitz, all have consistently outperformed the market for decades by using various forms of value investing. Currently I am a contributing writer to Seeking Alpha, Vinvesting.com, The Stock Masters and Value Investing News. Posts have been reprinted in The Wall St. Journal, Yahoo Finance, Google Alerts, Google Finance, TheStreet.com. 24/7 Wall St. and Topix.net.

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