Tags: Penney | stock | decline | rumor

Penney Denies Rumor of Bankruptcy Plans as Stock Falls

Tuesday, 15 Oct 2013 02:54 PM

 

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A J.C. Penney Co. Inc. spokeswoman denied a market rumor that the department store chain had hired bankruptcy counsel, as the company's shares slid 8.9 percent Tuesday.

Penney spokeswoman Kristin Kays said there was "no truth to the rumor," origins of which were unclear.

The retailer's shares ended 70 cents at $7.17 in heavy selling, including a high number of large block trades. The stock traded as low as $7.12.

Some 32.5 percent of Penney shares are held short by investors betting against the company's stock rising, making the issue volatile.

Penney has been struggling to revive sales after a failed experiment in 2012 to go upmarket alienated long-time shoppers and depleted its cash reserves. The company incurred huge losses and spent large amounts of money on store remodels.

Earlier this month, Penney closed a public offering of new shares that raised $785 million in a sale partly meant to reassure suppliers and their financiers that it had enough cash on hand.

Penney said last week that it expected to have $2 billion in liquid assets at the end of the fiscal year and that it expected sales trends to continue improving through the end of the year.

© 2014 Thomson/Reuters. All rights reserved.

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