Ed Lampert: From Trader to Owner

Updated from 2:53 p.m. EST

Ed Lampert wants you to believe he never thought of Kmart(KMRT Quote) as a stock trade, vowing Wednesday to build a retail powerhouse through the acquisition of Sears(S Quote).

Through his ESL Investment hedge fund, Lampert now effectively controls the third-largest retailer in the country, an entity Wall Street currently values at $22 billion based on the combined value of their shares. That's well over twice the combined market cap of the two companies when Kmart emerged from bankruptcy in May 2003.

Previously, Lampert has unlocked value in Kmart stock by de-emphasizing its operations, which have steadily deteriorated as measured by same-store sales. Instead, he has made a number of strategic sales of Kmart real estate and lifted the stock by lending his investing acumen -- or at least the perception thereof -- to its valuation. ...