Eddie Lampert caused quite a stir this spring with his
investment in discount retailer Kmart. According to SEC
filings, Lampert and his firm ESL Investments now control 52
million shares of Kmart, or 51 percent, following the emergence
of the retail chain from Chapter 11-bankruptcy protection on
May 6. That stake, which cost Lampert an estimated $600 million
to $700 million, barely budged during Kmart's first month of
post-bankruptcy, over-the-counter trading. Investors were
skeptical that Kmart was any better positioned to compete with
rivals Wal-Mart and Target than it had been when the troubled
retailer had filed for bankruptcy 16 months earlier.
On June 10, however, market sentiment turned. Kmart shares
started to take off following the company's NASDAQ listing.
Within a week and a half, its share price had soared from $15
to $25, helped at least in part by its very thin float as short
sellers rushed to...