Now that Kmart has acquired Sears, how it is possible that BOTH stocks soar? How can BOTH stocks exist if one acquired the other!?! Also, does the FTC or SEC have to approve this, or what?
Ah, America! Where one-stop shopping is literally one stop. That’s the beauty of free-enterprise. And, we had to study about the Russians not having any choices!
Because the merger hasn’t happened yet. It was just announced today. If I remember correctly, the merger is supposed to take place some time in the first quarter if next year.
Did the stock holders approve this? Oy, what a tragedy for Sears! K = Krap! How the mighty have fallen! - Jinx
Why doesn’t Wal-Mart just go in for the kill, and buy them both out? A Wal-Mart on every block! :rolleyes: - Jinx
I doubt there are any anti-trust issues involved, since they aren’t big enough, even combined. So the only approval needed would be both company boards, and they got that today.
They will be able to buy cheaper from their suppliers, because of the increased buying power. They also will save some on combining management, etc. It comes down to Walmart was eating their lunch and they had to grow, at least in the case of Sears. Actually, K-Mart came out of bankruptcy and was doing real well, since they bought Sears with the cash they’d accumulated.
Is this everything? My wife said the same thing and I’m not doubting you, I’d just like a cite if someone has one handy.
How bad off was Kmart, and how well did they do? Who led them to victory? (please don’t say M.S.)
Wasn’t it more of a merger than a buyout, given that Sears keeps the name in the parent company?
NPR’s business/economics news show, Marketplace, did a great run-down about the merger and the man who made it happen. Eddie Lampert was a Harvard B-school grad (Tinfoilers take note: also a Skull and Bones alum!) who went to work for Goldman-Sachs. He learned under the wing of Bob(?) Rubin, Clinton’s Secretary of the Treasury. He bought a controlling share (52%) in K-Mart last year or so, and in exchange, he brought in some retail experts, trimmed the sails, and used the massive influx of (his own!) cash to turn it around. You might remember that one of the things they did to raise money in their downswing was to sell several hundred stores… to Sears! Lampert also has a 14% ownership stake in Sears, so that probably made it easier.
And of course, Lampert briefly made headlines last year when some young ne’er-do-wells Googled “rich Connecticut person”, and got his name. They kidnapped him from his home, duct taped and gagged him, tossed him in a motel bathtub, and tried to ransom him. While waiting for the money to arrive, they used Lampert’s cell phone to order a pizza.
Hm, Marketplace doesn’t have the story up in their archives yet. Nonetheless, it’s worth checking out tomorrow. The announcer keeps it very relaxed and interjects humor into his discussion; if you can’t wait, yesterday’s All Things Considered also had good coverage.
You’ve got to be kidding. There are these stores called Target, Wal-Mart, Best Buy, Circuit City, and Home Depot that you might want to check out some time.
No, shareholders typically don’t vote on a merger until several weeks or months after it’s announced. Both stocks continue to trade in the meantime. If both rise on the merger announcement, it means that investors perceive that the whole is greater than the sum of the parts–that is, that the two companies together are worth more than they were separately. This means that investors (so far) agree with management that the merger was a good idea for both sides. Often, when a merger is announced, the stock of the acquired company will rise and the acquiring company will fall–an indication that investors think that the acquiring company overpaid.