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J. C. Penney Company, Inc. Message Board

  • desi_haseena desi_haseena Mar 12, 2014 1:34 PM Flag

    How low would it go if they really announce share dilution? No Bashers please

    I am just trying get an opinion, since lot of analyst are bashing JCP and saying shares can be diluted more. What do you think the worst care scenario be?

    Sentiment: Strong Buy

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    • parisonr@bellsouth.net parisonr Mar 12, 2014 9:31 PM Flag

      Right, you're a strong buy. Go cover your 100 share short ASAP!

      Sentiment: Strong Buy

    • There will definitely be another equity offering. The offering could be announced with the stock as low as $9, which would mean the stock would be sold at about $8.20, and the price would meander around that level for a couple weeks.

      But once investors realized that it will then be clear sailing ahead, the stock should move toward $15 or $20. Proceeds will be used to retire debt, which will provide an immediate reduction in operating costs and accelerate progress toward break even.

    • Just dont see a share offer period. Thus no reason we go lower. Wondering what hedge fund is over extended on a short with JCP. Upgrades keep comming, SP took BK off the table ( and liquidity ). Stock keeps trading up each week with alot of resistance at 9.00 a share ( looks like THE shorts dumps late in day to drop it but losing the fight the last four weeks ). I own ALOT of shares and holding off selling any covered calls till we get over 9.50 or 10.00 and then very close ( one weeks out max ). If the hedgie unwinds the short position we go right past 12-13 a share in a week. The drop to 5-6.00 was over done and should never occured with out the massive short selling. Now that short will need to cover. I can wait a year for JPC to trade 16-20.00 a share. Can the short wait that long with dead money? I doubt it.

      • 1 Reply to gyoung28105
      • "SP took BK off the table ( and liquidity )"
        /////////////////////////////////////////////////

        Hmmmm, sounds a lot different that what they really said - - - - - - "In other words, J.C. Penney is still likely to bleed to death, only it will take a longer time.................S&P raised its liquidity assessment from "less than adequate" to "adequate........but did have the presence of mind to add.......in our view, the capital structure is unsustainable....The ratings on Penney reflect Standard & Poor's assessment that the company's business risk profile is "vulnerable" and its financial risk profile is "highly leveraged".....................we believe further performance difficulties may cause the company to lose market share to other players"...........

        Now that doesn't mean I believe they are going to dilute with more shares to keep the 2 billion liquidity they promised at the end of the year - - - - last time I figured they would offer preferred's to raise cash and they surprised me with the dilution - - so since everyone is expecting a dilution this time they'll probably surprise everyone again with how they're going to raise cash - - - - - but in all likely hood it won't be from the actual business they're in - selling socks, shoes, and shirts - - - - - - - - - in other words, just more borrowing - - - - don't remember who said it but "You can't borrow your way to prosperity"

    • Way too many variables to call it. Common, secondary or preferred stock. How many shares will the dilution be? What is the market sentiment at the time?

      Given the correct set of conditions, a stock dilution could actually raise the value of the stock just as much or as fast as it could lower it.

    • Take a look at what Mulally did to Ford..Dilution an issue? When he was finished the shares issued were in excess of 3 Billion!...Ford traded down to a buck a share..Dilution not the real question, but Ford had to sell.
      JCP is no Ford, but the issue is the same, JCP has to sell, and forget about dilution. it's not about that.

 
JCP
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