Sears Holdings (SHLD) CEO Eddie Lampert — the single-biggest owner of SHLD stock — is looking to add more debt to the company’s already-heavy burden while simultaneously setting up a wave of dilution.

Specifically, it was announced Monday that the notorious hedge fund manager is directing the retailer to sell up to $625 million worth of notes and warrants to beef up liquidity for Sears Holdings before beginning the all-important holiday shopping season.

The impending cash injection was a welcome event. It was so welcome, in fact, that SHLD stock gained 23% on Monday, as a lack of liquidity was often found at the top of the list of headaches plaguing Sears Holdings.

However, once the dust is done settling and the math is done, Monday’s buyers might not remain in the same optimistic mood.

Old News for Sears Holdings

If the announcement rings oddly familiar, it may be because this isn’t the first time (or second, or third, or fourth time) Sears Holdings has sought to raise cash just to survive.

Last week, for instance, it announced the sale most of its 51% stake in Sears Canada (SRSC) to pocket $169 million. In September, SHLD stock owners learned the organization was seeking a $400 million loan from three different organizations: Lampert’s hedge fund ESL Investments, and two affiliated funds (a deal that partially fell through, by the way). In April, Sears banked $500 million by spinning off Lands’ End (LE). Going further back in time, Sears Holdings shed its Sears Hometown and Outlet Stores (SHOS) in 2012, garnering $446 million.

And during this entire period, the company has banked hundreds of millions of dollars — at least — by selling some of its prize real estate.

While the exact total of cash put in the bank through the divestiture of assets isn’t precisely clear, an estimate of $2 billion in just the past two years or so isn’t out of line. Yet, here’s Lampert again, looking for more than $600 million.

At this point, those who’ve patiently held their SHLD stock waiting for Lampert’s “transformation” to take hold have to be tacitly asking themselves one key question: Where’s all the money going?

A close-second follow-up question: Is another $625 million just going to be throwing away good money after bad?

Answers: Down the drain, and probably.

What SHLD Stock Fans May Want to Think About

Just to put things in perspective regarding how pointless an extra $625 million may be, over the past four quarters, Sears Holdings lost $1.87 billion. It wasn’t a particularly unusual stretch, either. In fiscal 2013, Sears lost $1.3 billion. In 2012, the retailer lost $930 million.

See, the issue at hand ultimately isn’t one of liquidity. Sears has a plain ol’ retailing problem — too few consumers that want to shop at its stores, and too few shoppers that want to buy what Sears is selling at the prices the retailer is selling its merchandise.

Just having more cash won’t inherently fix the true problem. It will only kick the can down the road. Eventually, if nothing actually changes about its retailing mind-set, there will come a point where lenders and backers can no longer sink more funding into the abyss. At that point, Sears will be dead in the water and SHLD stock will effectively be worthless.

And that time might be closer than most realize, as there’s nothing about the actual retailing aspect of the business Lampert seems to want to change.

Supporters and owners of SHLD stock will be quick to point out that this $625 million is likely to buy the time the company needs to complete its turnaround. That’s little more than wishful thinking at this point, though. Lampert has been throwing around the term “turnaround” since 2009, and has yet to even come close to turning things around. It’s unlikely one more year and another $625 million is going to change things for the better.

Indeed, a closer inspection of the details at hand suggest this fundraising might not be an impressive “able to” situation, but rather, an alarming “have to” situation.

The notes are costing the company an annualized rate of 8% — much higher than market rates, possibly indicating serious concerns about the retailer’s viability. As Belus Capital Advisors Chief Executive Brian Sozzi wisely (but rhetorically) asks (via Reuters):

“This is their second initiative to raise money for the holiday season, which really makes you question — what are they hearing from suppliers? Are they [Sears] starting to get concerned if they can get shipments post holiday season?”

In other words, the red flags are starting to wave in earnest.

Bottom Line

As before Monday’s announcement, bet on SHLD stock at your own peril. The only real positive that can be said of the notes and warrants is, Eddie Lampert is putting a big chunk of his own money into the offer.

Then again, he’s got it to lose, and he has to show a certain degree of confidence in his own leadership even if it proves costly.

As of this writing, James Brumley did not hold a position in any of the aforementioned securities.