The last chance for Staples?

I have suggested to short the whole retail sector last week. One example of a dying company is Staples (SPLS) specialized in office supplies. It used to be a great company to own until the advent e-commerce. You have certainly noticed that Staples have been busy to close out its stores throughout the country and it is on the verge of bankruptcy, which is just a matter of time if no miracle appears. But a miracle may be brewing for it!  On Apr 4, The Wall Street Journey reported that Staples is considering to sell itself and is “in talks with potential private-equity bidders”. The news made SPLS jumped over 15% instantly. If successful, it will be worth at least $7 billion or more. Currently its market value is just below $6 billion. In other words, a potential 15% or more gain is possible if Staples indeed gets a buyer.

 

I believe this is very likely an event actively undergoing as Staples can no longer live by its own. Similar to Macy which has publicly announced its intention to be sold, Staples may just follow this path before too late and this may very well be just its last chance available. If you are a risk taker, buying SPLS now may be a tradable idea as long as you are not too aggressive and watch your stop loss. At least no one should be aggressively short SPLS at the moment without knowing exactly what is in the card for it.