What does this mean for equity? The chance to earn $1.5-2.0 billion in EBITDA. At 6x EBITDA, the stock should trade between the mid to high teens and the mid to high 20s. The shorts should not be able to cover here. The stock should at least be above the $9.65 offer price as you are buying here with much better information about the company's prospects than when they did the offering. The difference is that the market has turned ugly and retail is downright awful. Still the retail darlings like Gap Inc. (GPS) and LULU are down but not cheap. If JCP continues to execute, my target prices should prove conservative. Christmas is coming early this year for the buyers of the stock, take the gift.
Sentiment: Strong Buy
I have a huge issue with this article. It states that shorts should not have an opportunity to cover. If that was the case, the stock would have shot upward today without turning back. The Sellers are still there and I'm simply stating facts. Caveat: I'm not short, but do trade the stock.
I trade in large blocks and every single time I attempted to sell JCP today over 10k shares, I would cause the sellers to push the price right back down. Either there's people out there still trying to short at these levels or the sellers are simply throwing the buyers a bone?
Regardless, I saw the warning signs and elected to take a small lose after 2 unsuccessful attempts to sell 50k blocks at or above $7.30. Every single time I put the order in, the bid got reduced under my price without any sales and I was not in AON situations.
Just food for thought!
the only issue is it's hard to catch a falling knife. wait a day before jumping in as we really don't know when the selling stops. does not matter why the selling. it has to stop somehow. glad I did not sell today.
Sometimes The Market Gives You A Gift To Buy
"A gift you have to Buy" - - - that you end up losing - - - - - - - - If you don't mind - take me off your Xmas list !