I recently took a moderate long position in the 15's assuming JCP would bounce back over $20. I still think it's a fair wager. But the combination of raising the credit facility (so they have enough cash to stock the shelves next fall?) and this firing of many site managers (desperation?) is ominous.
Probably still a bit early to have jumped in. With the Martha Stewart issue that hasnt been resolved and not likely any catalyst in the near term to materially increase sales (conversely, the renovations will likely depress sales for another quarter or two), there is more likely negative near term news than positive. The Martha case, which is now in mediation, is probably going to have a negative ending. If I were Macys, id do everything to foil this and drag it out as long as possible, which would result in big losses for JCP on the items they've ordered that were designed by Martha and have empty shelves. Most analysts also have revised price targets to the low teens and without material improvements, I dont see any optimism coming from the analyst community.
After another bad quarter or two, it may make sense to pick up some shares closer to $10 range and bet on the holiday season as well as a potential turnaround. Now is too early and too expensive in my opinion.