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Why Sears Holding Corp Stock Was Falling Today

What happened

Shares of Sears Holding Corp (NASDAQ: SHLD) were sliding today as investors pulled back following yesterday's surge on news that it would begin selling Kenmore products on Amazon.com. As of 2:58 p.m. EDT, the stock was down 6.8%.

Image source: Sears.

So what

Sears stock soared yesterday on the surprising news that it was partnering with Amazon to sell Kenmore and other appliances, and that they have been integrated with Amazon's voice-activated Alexa technology. The stock jumped as much as 24% on the announcement yesterday, finishing up 10.6%.

Today, the stock has fallen steadily as the market comes to the realization that the Amazon partnership is not a cure-all for the company's troubles. Yesterday's news even brought down rival brick-and-mortar stocks

Kenmore may be the company's most valuable remaining brand, but it still makes up a relatively small percentage of Sears' revenue, which continues to evaporate as same-store sales plummet and the company plans to close around 250 stores this year.

Now what

The fact that Sears is even partnering with a competing retailer seems to be a sign of the company's own desperation, but the stock, with a market cap under $1 billion, is primed to jump at the slightest piece of good news. The only way the new Amazon partnership would have a meaningful impact on Sears is if it's the beginning of something more substantial -- such as if Sears sells assets to Amazon. For now, there's no indication of any tightening of the relationship, and Amazon has been picky with its acquisitions over the years. 

Given that, today's sell-off seem justified.

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Jeremy Bowman has no position in any stocks mentioned. The Motley Fool owns shares of and recommends Amazon. The Motley Fool has a disclosure policy.