Friday, September 27, 2013

J.C. Penney's Horrible, Atrocious Week $jcp $shld $wmt $gs $tgt $xly

J.C. Penney's Horrible, Atrocious Week $jcp $shld $wmt $gs $tgt $xly

What exactly happened?
On Wednesday, a Goldman Sachs report raised concerns about the firm's liquidity position, suggesting it would be too tight for comfort in the current quarter. Equity shareholders didn't like the sound of that, and they sold the stock down by 15% (which turned out to be the right thing to do).
The following day -- after the market close -- J.C. Penney responded by announcing a highly dilutive share offering to raise up to $932 million; keep in mind that this is a company with a current market value of less than $3 billion. The offering of 84 million shares was priced at $9.65 apiece, a 7.4% discount to the previous day's closing price.

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