Hedge Funds Lose Big After Sears Drops 24%

Sears Holdings Corp (SHLD) plunged today after the company disclosed its Q4 EBITDA guidance. The expected adjusted EBITDA will be less than half of last year’s amount, below analysts’ expectation. Meanwhile, according to Reuters, Sears Holdings Corp announced that “it intends to implement a series of actions to reduce on-going expenses, adjust asset base, and accelerate the transformation of business model.” The company plans to close more than 100 Kmart and Sears Full-line stores. SHLD is trading at $34.65 at 2:13 PM EST on Tuesday, down 24.43% or $11.20.

ESL INVESTMENTS

Here is a list of hedge funds that may suffer huge losses due to the price decline.

1. ESL Investments – Edward Lampert: loses $540 million

2. Fairholme (FAIRX) – Bruce Berkowitz: loses $182 million

3. Horizon Asset Management – Murray Stahl: loses $31 million

4. Empyrean Capital Partners – Michael A. Price and Amos Meron: loses $10 million

5. Chou Associates Management – Francis Chou: loses $5.42 million

6. Fine Capital Partners – Debra Fine: loses $2.48 million

7. Tiger Global Management LLC – Chase Coleman: loses $2.12 million

8. MFP Investors – Michael Price: loses $1.04 million

9. HBK Investments – David Costen Haley: loses $280 thousand

10. AQR Capital Management – Cliff Asness: loses $250 thousand

DISCLAIMER: These calculations assume that these hedge funds did not increase or reduce their stock positions in SHLD since the end of September. We did not take into account their option positions.

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