So many posts about JCP stock buyback, how the shorts are going to take it...well, in the shorts, etc. WWZG rather reminds me of our old pal, Alphabetboy. As I have said before, it doesn't take much to move this stock one way or the other.
In the meantime, I am content to rely on factual information ("The 8 Point Path To J.C. Penney's Obsolescence" - at Seeking Alpha(Sat, Mar 23) and not let the downgrade 'du jour' cause too much concern. The future of this company - long or short-term - is bleak. Without some dramatic change in strategy, tactics or management, JCP is going to be gone. The landscape is littered with the bodies of 43,000 former employees, the cash well is drying up rapidly and management still doesn't have a clue as to how to turn this company around.
The much-publicized Joe Fresh launch has done very little to effect the share price. The JCP advertising campaign is under-funded and the execution is average, at best. The Macy's-Martha Stewart-JCP mediation efforts have yet to yield any positive results. Competition is heavily advertising Easter sales promotions (unlike JCP), JCP management (including Ackman) have all gone into hiding...except to issue the periodic "No Comment" responses to the business press queries.
In truth, this company doesn't have a clear identity. They don't know who they are and neither does their customer. JCP is an "also ran" and the market niche they are trying to serve has already defected to the competition. Their Internet presence is laughable, particularly ironic since "Genius Boy" came from Apple.
The company is probably going to have no other choice but file for bankruptcy and try to restructure itself as a much smaller entity. The trick for all investors is to get out before that happens.
I agree. The JCP BoDs is not the sharpest group. They seem to follow Ackman's lead...and look where that has gotten the company. Ackman's biggest mistake was bringing in RJ. His second biggest mistake was that his ego would not allow him to admit to himself that he made a huge mistake installing RJ as CEO. The amount of carnage these two clowns have wrought on JCP in just over a year is truly amazing...one for the B-School textbooks.
It has certainly gotten quiet lately and that to me means something is happening in the background. The BoD will act soon, and as mentioned when the pps stays below 15 for a couple weeks then it will be over.
Amazon could buy it - - - - 3-4 billion, pocket change - - - they get cheap brick and mortar presence in every state - - solves their problem of collecting sales tax when it becomes law(I know it is already, just nobody obeys it) immediately puts other web sales sites at disadvantage - they buy additional distribution network, ready made - - - - AND they would have no problem fixing that KRAPPY thing JCPenney calls a web site - - - I'm surprised their sales are only off 50% - - - - JCPenneyFRAUD(aka mole) can't blame that on poor morale - - - -
Geez- - - - I'm so smart it's a wonder I'm not rich !!!!!!!
I am not convinced that there would be a strong enough upside for Amazon to buy JCP and open brick and mortar stores in shopping malls or even as stand alone stores. The traditional brick and mortar bookstore model has not worked out well for the likes of Barnes & Noble. It is rare to even see a traditional bookstore nowadays. Those that do exist are more specialty operations (artsy and obscure books).
On a tangential subject, I think if/when JCP hits somewhere in the fourteen-plus level and stays there for a couple of weeks, we are going to see some activity in the boardroom. For some reason, I think a PPS in the fourteen-and-change range is going to send a psychological jolt and test the pain tolerance of the JCP Board of Directors. Most likely, patience will run out for RJ and a former CEO will be installed on an interim basis. Also, this could provide an "out" for Ackman. If his hand-picked CEO is shown the door, he has an opportunity to voice his disagreement by following Vornado's lead and take a sizeable position off the table. He might further distance himself by resigning his board seat.
The future and resulting crash of JCP would then not be entirely his fault and he could always try to save face by saying, "If only the board had stayed the course, RJ could have turned this around." A face-saving and money-saving door which I believe Ackman would eagerly walk through if given the opportunity. His losses on JCP and Herbalife have to be some concern to Pershing Square.
All conjecture, of course...but I would not be shocked to see it come to pass. We will see soon enough as it probably won't take long for JCP to hit the fourteen and change level.
I have a feeling we'll see something fairly soon from JCPenney - - - everything is too quiet and too many "no comments" - BOD uttered the words "Possible sale" - I don't believe the taking private theory - - - even though it's not much - Ackman would still have to find someone with actual money to throw at this dog - - - too bad of financial condition for a leveraged buyout - - - every day that passes narrows their options - - - - possibly another chain with a desire to create an instant footprint nationwide??? - - most of the major chains would have 90% overlap with their current stores - - if the BOD and Ackman are very very very sure they have a good plan that will work they can always sell more real estate to generate cash - - - - have to be careful of debt covenants however - - - could spin off real estate into a REIT - payoff debt - close the bottom half of their stores - - stop shops after the 1st dozen - - - FIND SOMEONE FAMILIAR WITH COMPUTERS AND THE INTERNET TO FIX THEIRDAMNWEBSITE - IT'S A DISGRACE - - - the internet would be quicker and easier to transform in a cash generator as opposed to revamping brick and mortar - - - - I would ask WHERE IS JCPENNEY LEADERSHIP but they're probably making their "golden parachute" ironclad !!!!
Possibilities are many....
1. Seek an offshore buyer that wants a US presence?
2. Spin off real estate into a separate REIT entity with a significantly downsized brick and mortar presence?
3. With scenario number 2, they could work to establish a strong internet presence to appeal to a wider, shop-online audience? But, they would have to spend a lot of money promoting their website and that would require a knowledgable marketer at corporate.
4. Voluntarily agree to enter bankruptcy/restructuring?
5. Ackman follows Roth's lead and takes money off the table...stock plummets?
A.) Everything is too quiet...something is in the works and "news" should be breaking soon. RJ out is the most likely scenario, I believe.
B.) Everyday that passes narrows their options.
c.) Financial condition is too poor for a leveraged buyout.