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Why These Titans of Wall Street May Be Tripping Over Themselves to Buy Shares of Dying Sears

It's only a matter of time before Sears Holdings Corp. (SHLD) goes bust.

Wall Street knows it. Sears knows it. But does Fairholme Capital Management and Sears' embattled CEO Eddie Lampert know it?

Fairholme bought 286,600 shares of the struggling retailer from March 23 to March 27 for between $8.05 and $8.46, according to a new filing. Bruce Berkowitz is the founder and chief investment officer of Fairholme Capital Management and president and director of Fairholme Funds. He also sits on Sears' board of directors and has been a staunch supporter of Lampert through the years.

Fairholme now owns 26.9% of Sears' outstanding shares, which are currently valued at $325 million. Berkowitz has taken a bath on his investment in Sears. Fairholme has been a Sears investor for more than a decade, having initially reported buying stock in the retailer during the third quarter of 2005, according to Bloomberg data. Fairholme's average cost on Sears, according to Bloomberg data, is $42.05 a share or 73% below current levels.

Meanwhile, Sears Chairman and CEO Eddie Lampert also purchased 526,000 shares of the company last week, according to a filing on Friday. Lampert is Sears' largest shareholder and has been atop the dying retailer as CEO since...