NEW YORK (TheStreet) -- Shares of Sears Holdings Corp. (SHLD) were plunging in late morning trading on Wednesday, after it announced its plans to spin off about 254 stores into a real estate investment trust, Reuters reports.
Late Tuesday, Sears announced that its planned REIT, Seritage Growth Properties commenced a rights offering for at least 53.29 million class A common shares.
Under the terms of the rights offering, Sears is distributing to its stockholders, one transferable subscription right for every share of Sears common stock held as of 5:00 p.m. ET on June 11.
The subscription right entitles the holder to buy one half of one common share of Seritage for each share of Sears Holdings common stock for $29.58 per whole share.
The subscription rights offering will expire on July 2, Seritage said.
The struggling department store retailer released its first quarter earnings on Monday.
The company posted a loss of $2 per share, while revenue fell to $5.88 billion from $7.9 billion a year ago.
Analysts polled by Thomson Reuters were expecting a loss of $2.59 per share on revenue of $6.08 billion.
Comparable store sales fell 10.9% in the quarter, made up of a 7% decline at Kmart and a decrease of 14.5% at Sears Domestic.
"During the first quarter, we made significant progress in our transformation from a traditional, store-network based retail business model to a more asset-light, member-centric integrated retailer leveraging our Shop Your Way platform," Sears CEO Edward Lampert said in a statement.
About 1.01 million shares have exchanged hands as of 10:26 a.m. ET today, compared to its average trading volume of about 669,652 shares a day.