Sears rejecting Ohio’s $400 million offer was the best thing to ever happen to the State of Ohio.
Remember, Kasich claims that using JobsOhio “secret” math, Ohio was guaranteed to get a return on its investment within a year. So, what kind of headlines would Governor Kasich had seen if Sears had accepted his offer?
First, we learned on December 30th that Sears was closing hundreds of stores including six K-mart stores in Ohio this year. Ohio is tied for second with only Florida have more planned store closings. The result is hundreds of jobs lost. Kasich would have committed $400 million of State tax dollars to bring a company on the verge of cutting hundreds of jobs in Ohio.
But, hey at least Wall Street would react positively to a company downsizing to becoming leaner in order to compete, right?
Oh, wait, that’s right, last week Standard & Poor’s downgraded Sears’ credit rating to two notches lower into junk bond territory, after Moody’s already had done the same. With Moody’s, Sears is rated B3, which is six levels into junk bond status. Fitch beat them all to the punch and downgraded Sears’ credit rating on the 29th of December, to CCC (non-investment grade risk with vulnerability of default) from B, making it the only rating company not rating it as junk bond status. All rate the company’s outlook as negative.
On December 9th, Sears Holding stock was trading at nearly $57 a share, but now is trading at $29.65. Last week, a CNN report named Sears as a likely company to file for bankruptcy this year.
So either every credit rating agency and financial reporter is wrong about Sears, or…..
John Kasich and Mark Kvamme have no freakin’ clue what they’re doing.