What happened

Shares of Sears Holdings (NASDAQOTH:SHLDQ) skyrocketed today after Chairman Eddie Lampert offered a rescue plan over the weekend to save the bankrupt retailer. Sears also said it will close 80 stores by late March 2019 now that the holiday season has passed. As a result, the stock jumped 58.6% to $0.27 a share.

So what 

Lampert, the hedge fund tycoon who was at the helm through a merger with Kmart in 2005 and the financial crisis, put together a $4.4 billion offer, which includes taking over 425 stores and offering a $1.3 billion loan to help turn around the business.  The plan would need to gain approval from creditors and the bankruptcy court, but it's easy to see why the stock is spiking on the news.

The exterior of a Sears store.

Image source: Sears.

Lampert and his hedge fund, ESL Investments, which are the retailer's biggest shareholders and creditors, have been angling for a way to take Sears private in recent months, and Lampert has maintained that a slimmed-down Sears would be profitable if money-losing stores were closed.

Now what 

Sears also received a combined bid from liquidation firms Tiger Capital and Great American Group, indicating a potential bidding war for Sears' assets as well as interest from multiple parties. That could push the stock even higher, but shares will continue to be volatile as Sears' advisors will determine by Friday if any bids are qualified to be part of an auction set for mid-January.  

Expect the stock to swing one way or the other on Jan. 4, when investors will receive the decision on the buyout bids and we see whether this will become another chapter in Sears' long history.

Jeremy Bowman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.