What happened

Sears Holdings (NASDAQ:SHLDQ) stock continued to trade lower Friday, falling as much as 9.7%. The stock is down about 9% at the time of this writing. The lower stock price extends the stock's sharp decline since last Thursday, with shares down about 31% during this period.

The bulk of Sears stock's losses since last Thursday have followed the company's Jan. 23 press release stating it planned to exchange conventional bonds for convertible bonds in a private debt exchange that would help alleviate some near-term cash flow pressure at the cost of diluting shareholder stock.

A chalkboard sketch of a stock price falling

Image source: Getty Images.

So what

Sears' plan for a debt exchange shows signs of desperation -- and investors don't seem to like it. Shares slid steeply on Wednesday, Thursday, and again today.

Sears' troubling cash situation, highlighted by the company's desperate moves to juggle its debt, added to concerns earlier this month when the company reported a double-digit decline in comp sales in the November-December period.

Now what

There may be more creative financing to come. Sears CFO Rob Riecker said in a Jan. 10 press release that the company is "actively pursuing transactions to adjust our capital structure in order to generate liquidity and increase our financial flexibility."

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