Rumor Spreads That Sears Might Go Private

Sears Holdings Corp (NASDAQ:SHLD) shares and options mounted Tuesday on rumor the operator of Sears department stores and Kmart might go private.

“There is a rumor that Bruce Berkowitz of Fairholme and Eddie Lampert could take Sears private,” Jon Najarian, a co-founder of online stock, options and futures brokerage TradeMonster.com in Chicago said.

That speculation was after some bizarre buying in Sears call options during the first 25 minutes of trading, according to Najarian. Buying of Sears stock and options rose as the rumor of a leveraged buyout spread to traders. This positive news comes just days after CIT Group Inc (NYSE:CIT) stopped loans that Sears’ suppliers use to finance the goods they sell.

Is the rumor credible? Or just attempt by institutional investors to push the stock price up one more time in an effort to mitigate some losses in the stock sale?