I hate saying I told you so. No I don’t. I love saying I told you so. I wrote my first article about JC Penney being a future bankruptcy in early 2012.
http://www.theburningplatform.com/2012/05/15/j-c-penny-bug-meet-windshield/
I’ve written multiple posts since then.
The Wall Street shysters have continued to tout this piece of shit as a buy the whole way down. The stock is now down 45% on the year and down 75% since I wrote my first article warning of their demise. They are done. Their suppliers will not supply them with the inventory they need for Christmas unless they get paid up front. JC Penney is hemorrhaging cash. They don’t have it. They will be filing for bankruptcy shortly after their horrible holiday sales hit the presses.
There will be 1,100 vacant rotting hulks in dying malls across America. Maybe they can be converted into Soup Kitchens R Us. That is where the 150,000 JC Penney employees will be going after they get fired in the next six months. The fat lady is belting out a tune.
JCP Craters To Single-Digits As Specter Of Bankruptcy Filing Rises
Submitted by Tyler Durden on 09/25/2013 10:39 -0400
Here’s why: 
As we reported in detail yesterday, as part of Goldman’s Buy JCP CDS reco, the firm conducted this recovery analysis on the unsecured bonds. Its best case recovery on the unsecureds: 65% (and 13% in the worst case). Translation: equity is “impaired” in pretty much any case.
They should sell out to a Chinese company. They can use the stores to produce iCrap, and import Chinese workers, since Americans aren’t smart enough to build devices of technology. Kids are taught about “diversity” and “political correctness” in school, but nothing about how to have a job or work. It’d be a “win-win”. They could also use part of the stores to do organ harvesting from the FSA, I’m sure the Chinese could find some use, organs, for the 100 million people that don’t work or produce in the country and cost $1 trillion a year to support.
Maybe Obama and CONgress can bail them out ? After all Bennie is printing money…why not give it to another corporate sink hole !
J.C. Penney shares tumble to a near 13-year low on fresh liquidity concerns
September 25, 2013, 12:54 PM
By Andria Cheng
J.C. Penney Co. JCP -12.65% shares got pummeled again on Wednesday, falling to nearly a 13-year low after Goldman Sachs initiated coverage of its credit with an underperform rating and adding fresh worries about its liquidity as it struggles to turn things around.
Penney shares most recently traded down 14 to $10.26 after earlier declining to $9.93, their lowest since December 2000.
Goldman Sachs analyst Kristen McDuffy rated underperform the company’s 7.95% unsecured bonds due 2017, 5.65% notes due in 2020 and 6.375% notes due 2036, which her data showed totaled about $1.01 billion.
“In our view, a combination of weak fundamentals, inventory rebuilding, and an underperforming home department will likely challenge J.C. Penney’s liquidity levels in 3Q,” she said. “In order to safeguard against a potentially poor 4Q holiday season, it is likely that management will look to build a bigger liquidity buffer.”
After having drawn down an $850 million credit revolver and getting a $2.25 billion term loan earlier this year with the help of Goldman Sachs, Penney is in talks to raise more cash, Bloomberg reported recently.
McDuffy said she expects the company to face a difficult second half, with same-store sales likely showing slower-than-expected improvement, “increasing the risk of a poor holiday season that the company can ill afford.”
She forecast a 7% drop in third-quarter comparable sales, followed by a 2% increase in the fourth quarter and another 8% decline in the first quarter. She sees the retailer burning through more than $300 million in cash to restock its private-label merchandise as CEO Mike Ullman is reversing merchandise changes engineered by former CEO Ron Johnson. The analyst expects inventory investment, combined with $200 million in capital spending, will lead the company’s cash to drop to $755 million in the third quarter from $1.54 billion at the end of second quarter.
Even though same-store sales will likely show gradual improvement, liquidity again becomes challenged in third quarter of next year, she said.
Meanwhile, the analyst noted Penney still has some “liquidity levers” it can pull. They include 240 acres of vacant land surrounding its Plano, Texas, headquarters that’s not part of its term loan’s collateral. Penney also owns 30 tire, battery and automotive locations that also aren’t pledged as collateral. And it has eight regional mall partnerships that it could monetize, the analyst said.
With the liquidity still a concern, Penney’s lawyers, along with lawyers for Macy’s Inc. M -1.47% and Martha Stewart Living on Wednesday also are reportedly back in court on Wednesday. A New York judge is deciding how to rule over the contract dispute over Macy’s claim that it has exclusive rights to Martha Stewart MSO +0.00% designed products, which it said prohibits Penney from selling them in its stores.
Admin
I’m thinking about cashing out my massive holdings in JC Penney and going all in on Sears. What’s your take on that move?
Hey, where’s that thingy to post images?
SSS
I recommend you put all your money into marijuana futures.
I had a major site meltdown earlier and all of my plug-ins were deactivated. The site was slammed with spam and I forgot to reactivate the image plug-in.
So, my son, SJ, isw a firm believer in traveling LIGHT. In addition to the pants he’s wearing, he packed one other pair of jeans. Both have tears/rips in them. I guess that’s cool. But, Ms. Freud no likey-likey.
So, she went and bought him two more pair of jeans in, of all places, Sears. (I know this is a JCP story.) She did go on a Monday … but she said she saw MAYBE 2 or 3 other customers in the entire store. Sears ….. goin’ down baby.
How about Kmart,?are they going out of business?I get my blood pressure medicine there and it’s cheap.Only 4 dollars for 30 days of medicine.
Kmart is part of Sears. They probably have two years until bankruptcy.
bb, look into olive leaf (actually the compound in it), costs about $5 a month and is natural, carried in vitamin/health stores, with Swanson Vitamins the cheapest I’ve found. Hub went on it 4 years ago, takes 2 caps a day (standardized dose, all 100% olive leaf supplements are close to same) his blood pressure has been normal or lower ever since. He could not tolerate the BP meds at all, I couldn’t tolerate the side effects. Anyway, look into it, if TSHTF your meds will quickly become completely unavailable.
Sears is now offering a website where you can go on and get coupons (the one I saw was 20% off any item), any day of the week. Not a great idea in an era of diminishing profit margins.
Bye-bye Sears, Kmart, Penny, Barnes & Noble, and probably many more over the next couple years.
That recovery is right around the corner, ask the counties millionaires who reported higher-than-expected good feelings about the economy in August. Highest readings in 9 years.
A fool and his money will soon be parted, bank on it.
They’re lining up like dominoes.
Here’s the thing…everyone(well, the 99% at least) is gettin’ squeezed. So I would think that many of the elderly have just quit buying entirely(clothing, housewares).They’re making do with what they have. The boomers with any sense are buying much less and looking for bargains or if they’re really smart, not buying either, trying to hang on to some of their money or pay down debt.
Of the younger consumers, many wouldn’t be caught dead in a jcp or sears. They’re shopping elsewhere. And since many of our young people are unemployed, if they’re shopping at all it’s probably at walmart or goodwill.
Growing children need clothing and shoes, but hey, around here, folks seem to love a good garage sale.
So who’s left??? (Besides Mrs. Stucky?;-)) She can’t do it alone.
Based on shopping, I would have rated JCP ahead of both Sears and Kmart. Honestly, I cannot believe Kmart is still in existence – who shops there? What is for sale? There is a zombie Kmart in my town, with a starkly empty garden center area, and maybe 10-20 cars in the parking lot at any time. I don’t get it.
I think the only real question is which of these zombietailers make it past Xmas without a bankruptcy filing.
Be damn sure all your gifts won’t need returning or exchanging this year, a lot of the retailers won’t be taking returns or exchanges after 12/25.
Kmart already went through bankruptcy. Eddie Lampert grabbed it after the debt was wiped out. Sears/Kmart only has longer because their balance sheet is stronger than JCP. They all suck. They are all dead men walking.
Sears/Kmart: a good and middling company, fused in bankruptcy and utterly destroyed. I once considered Sears to be THE place to buy tools of almost any kind. After some nasty experiences there about 4 years ago (funny business with claimed prices on an item I wanted to return) I won’t even set foot in one. A lot of their tools are now made in China, and either have no warranty or it isn’t worth a damn
Kmart – it was a crappy store even back in the 80’s. I haven’t been inside one in at least 15 years, maybe 20+. I don’t know anyone who has even gone in one, much less shopped there, in 10+ years. I remember the bankruptcy filing and all, I just can’t believe it still exists in any form. Being freed of debt doesn’t help much if you have no revenue, and I can’t see where they get any revenue.
@Persnick, this cracks me up, “…Kmart – it was a crappy store even back in the 80′s…”
Kmart is the main reason I started finding ways to earn money at the old age of eight.
My parents were broke (1975) and I couldn’t take one more pair of their crappy knockoff jeans or sneakers all bought on sale at Kmart. When they were flush I got lucky and received one outfit from Monkey Wards, and a couple more from Kmart. Needless to say I HAD to figure out a way to buy my own clothes.
The only think I will miss is that there is a smallish Kmart less than 2 miles and one turn away from me, perfect for last minute birthday presents (for parties/friends), sports team t-shirts (on sale) and clearance shopping when they really hit big discounts.
I’ll admit that I actually prefer to buy my Chinese made crap at Kmart over WallyWorld, smaller store and won’t be an option for much longer.
Just wait for the TSA to start groping and xraying shoppers as they enter the mall or stores. It is coming.
That will be the end of brick and mortar stores. Then, you will no longer be able to buy shit with fiat. All electronic then.
Damnit, where did I put my tin foil…..
taxSlave,
I had a similar thought yesterday. Only i pondered how long before the
first metal detectors show up. Yes, i believe it’s coming.
But you won’t find me there.
The Gestapo in DC has been salivating at ways to impose TSA-style oppression on the whole population, not just air travelers. The debacle in Nairobi will probably start the ball rolling, along with a mass shooting here “that couldn’t possibly have been prevented” (notwithstanding months or years of warning signs). Actually there was an attempted mass shooting a year or two ago in Oregon, but it was stopped as soon as it started by a civilian with a (legal, duh) handgun. Hence no real news coverage of it.
I only go to a mall maybe 3-5 times a year as it is now. Install any intrusive crap and I’ll go 0 times a year. But that may be the goal. It would be a good cover for the obvious disintegration of the shopping mall / buy-worthless-crap consumerism system of the last 40+ years.
I live near a KMart and occasionally run in there for something. The store is pretty busy, and between the clientele and the merchandise, I get the impression I have been transported to the third world.
Piling On The JCPain: Citi Lowers JCP Target To $7, Questions “Adequate Cash For 2014/15”, Sees $1/Share Floor
Submitted by Tyler Durden on 09/26/2013 06:40 -0400
Yesterday, it was Goldman which (paradoxically, considering the firm’s role in the recent Term Loan underwriting) took the axe to JCP securites, both bonds and stocks. Today, following news that JCP is considering a $750MM-$1Bn equity raise (of course it is – it is considering every possible option, including asset sales, a second lien and of course, a bankruptcy) which we believe if anything would be in the form of a rights offering as we commented yesterday…
… it is the turn of Citi’s Deborah Weinswig which after reviewing its JCPenney cash burn analysis, goes for the jugular with phrases such as “We think adequate cash for 2014/2015 is in question”, “The turnaround is taking longer than we anticipated, and we are concerned about a softening macro environment combined with deteriorating vendor relationships”, and of course “We maintain our EPS ests. but are lowering our target price to $7, down from $11 prev., based on an EV/Sales valuation methodology using our 2015 sales estimate.” And it gets worse: “Where’s The Floor? — As a supplement to our EV/Sales valuation methodology, we have conducted a basic liquidation valuation, yielding $324M total value, or $1/share.” Well, as long as there is a “floor”…
The highlights:
Where’s the Floor? Reiterating Sell; Lowering Target Price
Our Take — We are revisiting our cash burn analysis following recent meetings with other retailers and vendors. We still believe JCP has ample liquidity for 2013, but we do think it prudent for them to raise capital to cushion against a potentially challenging Holiday season (six fewer days, C.H.E.A.P. consumer, loss of a weekend YOY, etc.). We think adequate cash for 2014/2015 is in question. The turnaround is taking longer than we anticipated, and we are concerned about a softening macro environment combined with deteriorating vendor relationships (due to weak volumes and growing anxiety about on-time payments during and after Holiday). We reit. our Sell rating and lower our target price to $7, vs. $11 prev.
Lowering Target Price — We maintain our EPS ests. but are lowering our target price to $7, down from $11 prev., based on an EV/Sales valuation methodology using our 2015 sales estimate (unchanged). We assign JCP a ~0.45x EV/Sales multiple on our 2015 sales estimate (vs. 0.5x prev.). Our assigned target multiple is in-line with JCP’s historical median EV/Sales multiple of 0.43x, vs. slightly ahead previously, as we believe the turnaround is taking longer than expected.
Where’s The Floor? — As a supplement to our EV/Sales valuation methodology, we have conducted a basic liquidation valuation, yielding $324M total value, or $1/share.
What Could Raise the Roof? — One of the risks to our Sell call is JCP attracting mgmt. talent in the near term. There have been over 10 senior-level mgmt. exits since Ron Johnson left in April. JCP is operating with a “Swiss cheese” executive team, and we believe they continue to have difficulty attracting talent. Another risk is a better than anticipated Holiday season. We forecast SSS of (-7.5)% in 3Q13 and (-2.0)% in 4Q13, and these ests. reflect a consistent 2-year stack throughout 2013. Our meeting with KR mgmt. this week supports our view that consumers are putting more of their discretionary $$ towards big ticket purchases like homes and cars.
Where’s the Floor?
Our 12-month $7 target price for J.C. Penney (JCP) is based on an EV/Sales valuation methodology using our 2015 sales estimate. We assign JCP an approximate 0.45x EV/Sales multiple on our 2015 sales estimate, which results in a price target of $7. Our assigned target multiple is in-line with JCP’s historical median EV/Sales multiple of 0.43x. We believe that the stock will be driven by topline trends, as investors will likely use sales growth as the primary gauge to evaluate the company’s turnaround progress.
As a supplement to our EV/Sales valuation methodology, we have conducted a basic liquidation valuation (Figure 1). Taking our estimated real estate value (see Figure 4), plus current inventory value less merchandise accounts payable and net debt, we arrive at $324M total value, or $1 per share.
We note that the valuation does not reflect JCP’s forward looking cash burn. Should the company continue to burn cash, as we expect, the value per share would decrease (refer to Figures 2 and 3). We also have not discounted the inventory value to reflect any potential clearance, not included $1.35B of other accounts payable and accrued expenses, and not accounted for costs to unwind the business.
JCP Cash Burn Analysis
We have updated our JCP cash burn analysis as follows: Ample Liquidity for 2013 (with 2014 Still in Question)
Ample Liquidity for 2013: Management believes JCP will not need a capital infusion this year, and also believes that the company has ample liquidity for 2013. Our analysis doesn’t indicate that the company would need to pursue a debt or equity offering to shore up liquidity in the near term. However, if cash burn is running worse than our expectations, then JCP may need to raise capital to cushion against a potentially challenging Holiday season. We are forecasting a net increase in cash of +$501M in 2013, driven by JCP’s $2,180M term loan and $850M of revolver borrowings, offset by a decrease in operating cash flow of (-$1,266)M and capex of (-$950)M. We expect the company to end the year with $1,431M of cash on the balance sheet, which is more than adequate to fund its operations.
But Operations Are Eating Up Cash: We expect a significant decline in FCF (before financing) of (-$2.1)B for 2013. This level of cash burn is concerning and not sustainable.
Cash Burn Persists in 2014: For next year, we are forecasting a (-$132)M net decrease in cash. This reflects a use of cash from operations of (-$507)M, capex of $300M (which honestly seems way too low to us, but is an estimate provided by the company), and no incremental debt financing. We are forecasting a cash balance at year-end of $1,299M, which is still above the $500-750M that we estimate that JCP needs on hand to run its business. However, if our forecasts play out, we think investors will still be concerned with the negative cash burn for the year. Please see Figure 4 for a sensitivity analysis illustrating the ramifications of operating results below our estimates, should same-store sales fall short of estimates and the company resorts to higher-than-expected levels of clearance.
Relief in 2015?: We expect cash levels to slightly rebound in 2015, with a +$51M net increase in cash. However, our estimate is highly sensitive to samestore sales trends, and will heavily depend on how quickly the turnaround can be executed and the company can return to positive comps. We believe a lackluster Holiday 2013 season could put a 2015 recovery in peril.
JCP Real Estate Valuation
RE Value of $4.1B (versus our estimate of $2.7B detailed below) Doesn’t Cover Net Debt of $4.3B
Cushman & Wakefield (C&W) valued the company’s real estate at $4.1B ($3.3B for the stores + $0.8B for distribution centers and headquarters). The $4.1B real estate value is slightly below the company’s estimated net debt of $4.3B at year end. We believe C&W’s valuation at approx. $65/sq. ft. for owned stores could be optimistic.
We value JCP’s total real estate at $2.7B, using an assumption of $50/sq. ft. for owned stores. The median historical price per square foot for comparable department store sale transactions is $48 per square foot, according to CoStar. We question the value of stores in C/D tier malls (63% of total stores by our estimate), as many of these malls are declining in importance and demand from other retailers to open in these malls is low.
Our real estate valuation by comparable department store real estate transactions yielded a real estate value of $2.4B for JCP’s stores and $0.3B for distribution centers, for a total value of $2.7B. Please see the figure below for more detail.
* * *
But tell us how you really fell Deborah. As for JCP, we can imagine where it goes from here. It doesn’t fix the cable…
How To Lose 32% With Jim Cramer In Three Weeks: “Jump on J.C. Penney”
Submitted by Tyler Durden on 09/26/2013 17:42 -0400
One can’t make this up. Presented without commentary.
From Jim Cramer on TheStreet, originally posted on Real Money at 8:38 am on September 5.
Jump on J.C. Penney
Has J.C. Penney (JCP) bottomed? How many times have I heard that one? It has to be the most asked question now that we are seeing some of the highest quality hedge funds in the situation, including Perry Capital (run by my old friend Rich Perry) as well as Glenview Capital and Kyle Bass. Suffice it to say that I don’t think there could be many investors as wise as these people. They aren’t approaching the situation idly and I think they are going to be right. Why is that?
To begin with, let’s face it, even just for a trade, this could be a good one. Remember, lots of this stock was bought on the giant “print of pique” that Bill “taking my bat and my ball and I’m going home” Ackman unleashed in the market. Ackman famously upended the company by ushering in Ron Johnson, who then almost blew the whole thing up.
Then when Johnson got canned and the calm hand of Mike Ullman came back to pick up the pieces in the interim, Ackman alienated pretty much everyone I know in retail when he criticized Ullman for doing a poor job. Frankly, that was deeply disappointing given that Ullman had immediately raised capital to get through the holiday season. I don’t know how many others could have gotten that capital.
Now we have a very interesting situation brewing. First, we are getting signs that Ullman’s bringing back some of the old coupon-driven traffic. Second, I am sure most of the bad merchandise has been sold. Third, I think that the housewares department, which was a big hole in the ground for Johnson, will be squared in time for the holiday season. And fourth — and perhaps best of all — knowing that the extremely disruptive Ackman is no longer involved, a new CEO might actually want to come in now.
To me, that’s a lot of ways to get the stock to $18. That’s right, I am not talking about a turn. It’s too early to tell if we have a real one. But can this stock go up $5 on a new CEO and a better holiday season? Yes.
And that’s why it is worth joining these great hedge funds. Not because they are in it. We will have no idea when they exit. But because the time and the price are right. You don’t need to know anything else for the moment.
You certainly don’t, especially since three weeks later (from $14.10 to $9.87) you have lost 32%.
Fortuitous timing. I received an email from JCP HR Director asking if I wanted to be a holiday wrapper. I guess he viewed my 30 years of experience in marketing and advertising perfect fit.
Should I email him a note and ask if wrappers are paid in cash?
Geeze, Louise.
CONTROLLERS ALWAYS RESIGN ABRUPTLY WHEN THINGS ARE IMPROVING. RIGHT?
J.C. Penney shares hammered again on stock-sale plan, another resignation
September 26, 2013, 6:45 PM
By Jim Jelter
All the ground J.C. Penney Co. Inc. fought to gain during the regular session Thursday was lost in after-hours trade, swept away by news the struggling retailer plans to sell 84 million shares.
The move was spelled out in a filing with the Securities and Exchange Commission that also included an announcement that Penney’s controller, Mark Sweeney, resigned his position with the company last week, joining an exodus of top executives over the past few months.
Penney JCP shares fell as much as 4.5% to $9.95.
JCP
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Earlier in the day, the stock rose nearly 3% to close at $10.42, snapping a six-day losing streak. The rebound was powered by company reassurances that it still expects same-store sales to turn positive by the end of the third quarter and stay there through the rest of the year.
It’s been a rough week, however, with one of the biggest blows coming from a Goldman Sachs analyst in a note Wednesday warning that J.C. Penney’s credit deserves no better than an underperform rating. The note fanned a new round of fears among investors that the company faces liquidity problems and sent its shares close to a 13-year low.
Citigroup piled more pressure on Penney Thursday, cutting its price target on the stock to $7 a share from $11. It also said it would be “prudent” for Penney to raise capital to “cushion against a potentially challenging holiday season.”
Citi’s advice was apparently on target. Penney said proceeds raised by its 84-million-share sale will be used for “general corporate purposes.”
WATCHING THE CORPORATE & MEDIA RATS SCRAMBLE AROUND ON A SINKING SHIP IS AMUSING.
JCPenney Throws CNBC Under The Bus, Says CEO Was “Misquoted”
Submitted by Tyler Durden on 09/26/2013 21:46 -0400
As we pointed out earlier, today the investing public was witness to perhaps one of the most epic (and backfiring) media PR clusterfucks in history.
The key culprit it seems was CNBC, which reported on live TV just after 10:30 am that JCP “will not need to raise capital now”, refuting an overnight Reuters story which sent the stock to the mid-$8 level in the premarket, and which as Reuters observed led to a jump in J.C. Penney shares of “18 percent from their early morning low after CNBC reported Ullman’s comment” as seen below:
•1042ET – *JCP’S ULLMAN:DOESN’T SEE NEEDING TO RAISE LIQUIDITY THS YR:CNBC
•1044ET – *JCP CEO: DON’T SEE NEED TO RAISE LIQUIDITY THIS YR: CNBC
… which was either the result of live TV anchors reporting a false story posted earlier on the CNBC website (also confirmed by Reuters and WSJ) or someone at CNBC quoting a “source” during the live broadcast.
As is now known, this was a complete fabrication, only to be followed a few short hours later with an announcement by JCP that it would in fact proceed with an equity offering of up to $1 billion (with Goldman as lead underwriter). And naturally, it was only a matter of time before lawyers started making phone calls, and before someone got implicated in what in retrospect can be construed as very serious, and costly, 10(b)-5 securities fraud.
As it turns out, that someone is CNBC itself, which was just thrown under the bus by the very company it rushed to defend.
Moments ago Bloomberg reported, that “J.C. Penney Says CEO Ullman Misquoted on Capital Raise” adding that “Comments purported to be made by Ullman in “media articles” don’t reflect “any recent comment,” JCP says in e-mailed statement.”
In other words, JCPenney accuses CNBC of lying.
What is ironic is that JCP did not “notice” the allegedly false CNBC comments until well after the close, and well after the stock dilution announcement. Apparently JCP had no problem with CNBC “misquoting” its CEO when it resulted in a 10% surge in the stock in the moments after the announcement when countless shorts were forced to cover on false and misleading reporting and “news.” It was only after said quote was directly refuted by the facts that it became a problem.
The problem for JCP (and CNBC now apparently) is that there are many traders who lost lots of money (on both the way up and down, especially since another CNBC reporter just announced that the JCP offering will price in the $9.35-$9.75 range) and now, with definitive evidence that someone lied, are already retaining legal counsel with full intent to see their losses recouped. Did we mention that at 122 million shares changing hands, it was the highest volume day in JCP stock ever? Well it was.
The question is: who will be the guilty party. Was it JCP’s Ullman who indeed lied that the company “will not need to raise capital now”, when in reality it did? Or did CNBC intentionally, for whatever reason, misquote the CEO, potentially to benefit one or more affiliated investing parties, in order to potentially generate a short covering spree on false news?
In light of our sincere appreciation of both of these organizations, we can’t wait to find which one, or both, organizations end up in court paying millions to defraued investors.
And we certainly can’t wait to see how the SEC will get involved in this latest humiliation for US equity capital markets. Because at least superficially, we don’t see a reason why Mary Jo White would need to recuse herself from this particular enforcement/criminal action, at least this one time.
Mary Malone says:
“Fortuitous timing. I received an email from JCP HR Director asking if I wanted to be a holiday wrapper. I guess he viewed my 30 years of experience in marketing and advertising perfect fit.
Should I email him a note and ask if wrappers are paid in cash?”
Screw that! Tell ’em you want to be paid in pre 1965 silver coin!
JCPennyless Announces $9.65/Share Public Offering Price
Submitted by Tyler Durden on 09/27/2013 07:11 -0400
It’s official: the absolute wreck of a soon to be insolvent retailer that is JCPennyless, has just announced the pricing of its 84 million shares (thank you Goldman Sachs), and the price is $9.65.
“J. C. Penney Company, Inc. (JCP) (the “Company”) announced today that the previously announced underwritten public offering of 84.0 million shares of its common stock priced to the public at $9.65 per share. The Company intends to use the net proceeds from the offering for general corporate purposes. The offering is expected to close on October 1, 2013, subject to certain customary conditions.
The Company has granted the underwriters a 30-day option to purchase up to an additional 12.6 million shares of common stock. The Company`s common stock is listed on the New York Stock Exchange under the symbol “JCP.”
Goldman, Sachs & Co. served as the sole book-running manager for the offering.”
Putting this into context, this offering price is 25% below the $12.90 price at which Bill Ackman dumped his entire stake a month ago to even more clueless “investors”, and about 26% below the $13/share price at which Vornado sold its entire stake last Friday.
Existing shareholders: congratulations, you just got diluted by 44% (with the full overallotment), but at least you get to enjoy your misery for a few more months as the melting icecube of a company does what it does best: continues melting.
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Yahoo poll:
With all the problems facing J.C. Penney, will you still shop there this holiday season?
Yes, I like their stuff (996) 25%
Maybe, if the discounts are good enough (978) 25%
No, I never shop there anyway (1212) 30%
Makes no difference to me (783) 20%