Though there was no specific news driving the stock down today, the move seemed to be a signal that investors thought the stock was overbought yesterday. As of 10:52 a.m EDT, the stock was down 8%.
Sears stock rallied 14% yesterday after the retailer reported first-quarter earnings -- the stock was up by as much as 33% at one point. The move seemed to be in part a short squeeze as bearish investors rushed to cover their bets.
For the first quarter, Sears reported a profit of $2.28 per share, but that was due to the sale of the Craftsman tools brand during the period. Adjusting for that, the retailer, which also owns Kmart, posted a loss of $2.15 per share, compared to a per-share loss of $1.86 a year earlier. Still, that result beat analyst expectations for a loss of $3.05.
Comparable sales plunged 11.9% and overall revenue dropped 20.4% to $4.3 billion, a sign that the business continues to be troubled.
CEO Eddie Lampert expressed optimism about the business, saying, "While this was certainly a challenging quarter for our company, it was also one that clearly demonstrated our commitment to return Sears Holdings to solid financial footing."
Despite that statement and the bottom-line beat, the overall financial picture continues to be bleak for the company, and eventual bankruptcy seems probable. Investors seem to be remembering that today as the stock plummets once again.