$KSS Kohls Corporation trading significantly below fair value due to bankruptcy concerns

Degens, first credit where credit is due, I discovered this company thanks to Leland Roach. Please follow him on SA. The reason why I want to talk about this stock today is since the market has taken a turn two weeks ago and with upcoming policy effects taking place, this stock has been relatively flat. This is because the stock is already trading near bankruptcy levels and short float is roughly 45%. Meaning the cost to sell is significant. Moreover, the stock seems now detached from economic effects like most healthy stocks (healthy in the sense not near bankruptcy).

The major upcoming catalyst for this stock will be their earnings 11th of March. The company has been closing stores to free up liquidity to make up one big debt repayment. If they fail, the stock will drop lower because bankruptcy will be imminent. In this case I do not expect shareholders to receive anything.

Because the stock is trading near the bottom, detached from macro economic effects, I bought 2500 calls / 25 contracts with expiration March 14th. The company either has too announce that their plan to free up liquidity by closing unprofitable store locations is going well. Otherwise, the company will miss their debt repayment and the stock will trade lower. On the other hand, if they have a feasible plan and the CEO is able to restructure debt, this will be the signal that the company isnt completely dead and there is no reason yet for this stock to trade near bankruptcy level and I expect the stock to atleast go up near fair asset value with a depressing outlook but not bankrupt. Looking at peers like Macy, Ross, Nordstrom, there is some future for retail stores albeit depressing.

[Position details](https://preview.redd.it/lza75zqf2nme1.png?width=1085&format=png&auto=webp&s=cb0ebe81a1baccf42e4d63af3a8d09eb03aa1067)