Maybe if you took the time to look at the company's latest Balance Sheet from August 3, you would get it. The Balance Sheet shows Stockholders' Equity of $2.32 billion on 220 million shares. Factor in the Q3 capital raise of $0.8B less the cash basis loss of about $0.1B and you can see that the October 31 Balance Sheet will show Shareholders' Equity of about $3.0 billion on 305 million shares. That's virtually $10 a share book value. But we know that the company's substantial reqal estate holdings which were newly appraised in May is worth $1.1 billion more than what the books show.
So if the company were to decide to go out of business and liquidate, fair market value would be about $4.1 billion on 305 million shares. That's about $13.50 in a straight liquidation. Now you know why the likes of Soros, Bass and other world-class fund managers were more than willing to take substantial positions even when the stock was in the teens.
If you actually look at the facts as shown by the Balance Sheet and steel yourself against ridiculous talk about meetings with bqnkruptcy lawyers, financiers cutting off financing and 41 price targets by analysts in cahoots with the shorts, you get an entirely different view of where the company is.
Regarding JCP's cash situation, they are expected to have at least $2.0B on hand at 1/31/14. They will use about $300 million in the ensuing twelve months to fund cash basis losses and another $300 million for capital expenditures. That would still leave them with a hefty $1.4 billion at 1/31/15 without even closing any stores to raise more money.
A bankruptcy filing is utterly impossible in the foreseeable future and within a year, JCP should be cash-flow positive.
I don't get it either. They've got the same #$%$ stores that they've have for quite a while. JCP stores are still largely devoid of shoppers. There must be a lot of idiot investors out there eager to become JCP bagholders. ☺☺☺