Kate Spade Shares Stylin’ on Latest Reports; Sears Has a Fiscal Guardian Angel; Amazon Dismisses Gravity With Latest Patent

I’m so fancy…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Kate Spade wants to put itself up for grabs and that news sent its shares up 23%, giving Wall Street plenty of cause to celebrate. And the Street will take whatever it can get, especially since Kate Spade was down 9% just in the last six months. In fact, similar companies including Michael Kors and Coach have also experienced declines during the same time period. But the kicker is that both of those companies, along with four others, are being bandied about as potential buyers of Kate Spade. Talk of a potential sale is just what hedge fund Caerus Investors wants to hear. While the firm, which entered the picture back in 2009, hasn’t disclosed its exact stake in the company, it did send a letter to Kate Spade’s board back in November urging it to put itself on the auction block. And that’s exactly what’s planned for next month. With a market cap of $2.3 billion, Caerus thinks Kate Spade could get picked up for a nifty premium – between $21 to $23 per share -and naturally, Caerus stands to profit from that. But that wasn’t the only story to come out of Kate Spade today. Apparently, an options trader purchased 2,000 calls for Kate Spade shares just minutes before it was reported that it’s exploring a sale. A call, by the way, allows a buyer to score shares at a pre-agreed upon price. Not only was one very lucky buyer involved, but it also netted a very shrewd trader a cool $320,000 within minutes. Insider info? Hmmm. I’m sure the SEC would like to know. Because that would be so bad. Just ask Martha Stewart. As for Kate Spade, she hasn’t been part of the company since 2006.

On a another note…

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Image courtesy of Stuart Miles/FreeDigitalPhotos.net

Even though its stock just went up 9% – the most in two months – Wall Street definitely does not feel the same amount of love for Sears as it does for Kate Spade. The stock closed at a 52 week low just yesterday and its planning to close 30 more Sears and Kmart stores in early 2017. But there is someone who seems to love the embattled retailer unconditionally: CEO Eddie Lampert, who said he’s going to get a $200 million letter of credit for the troubled company. In fact, he has so much faith in the company  – and apparently he’s the only one who does – that he thinks that letter of credit could grow to $500 million. This is not Lampert’s first “loan” to Sears. In the last two years he’s shelled out over $800 million to the company.  Talk about faith.  At least this loan comes with guarantees that if Sears goes bust, its suppliers will still get paid. I wonder if the rest of his hedge fund buds over at ESL Investments feel the same, even as the firm continues to back Sears? For some inexplicable reason, Lampert is devoted to Sears, despite the fact that its sales are constantly going down and it has already lost billions. Most investors think the time has come to throw in the retail towel.  But not Lampert, who in addition to being Sears’s CEO and biggest cheerleader for the last four years, also happens to be its biggest investor.  However, others only see red flags and are wondering why Lampert is the only one eager to throw money at a company which has been losing so much of it in so little time.  Sears’s last quarter lost $750 million, so much worse than last year at this time when it only lost $454 million. Revenue fell a whopping 13% to $5 billion. In fact, in the last eight years, Sears has lost around $9 billion. Also, with the seeming exception of Lampert, everyone is wondering why Sears would need money right after the holiday season, which is supposed to be the most lucrative quarter out of the whole year.

Yeah, they thought of that too…

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Image courtesy of vectorolie/FreeDigitalPhotos.net

Because fulfillment centers weren’t enough, now the e-commerce giant is looking to do away with gravity – besides logistics companies – with its latest patent for an airborne fulfillment center (AFC). It’s exactly what it sounds like – a warehouse in the sky. Flying at a lofty 45,000 feet, drones would basically zoom into the warehouse, pick up items that were ordered and then deliver them.  The company’s ramped up its drone tech efforts and this latest project fits in nicely with that initiative.  Right now Amazon drone delivery requires that Amazon build warehouses in specific areas, on land, where drones can happily roam free and deliver items to customers. Some of the uses mentioned in the filing include fulfilling orders during football games. The AFC would be stocked ahead of time with certain game “essentials” that could be easily delivered as you cheer for your favorite team. Another idea would be to allow customers to order right from a giant ad board and have their items delivered “within minutes.” But before you start having nightmares of flying robotic insects whizzing all around you, Amazon is going to need to get major regulatory approval from aviation authorities before launching any airships.

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