You were warned about this one. Possible BK coming, and sooner rather than later, even with the recent stock offering that they managed to fleece people with. You are going to take a bath on those puts you wrote.
As a veteran of the Tyco and Pfizer crashes, I know what has to be done when adversity hits the stock price but the fundamentals haven't deteriorated much. The first things that I do of course is to look carefully at the Balance Sheet and the Statement of Cash Flows. Short-sellers can tell all kinds of lies and they can create short-term panic but they cannot stop a turnaround in the company's business and they certainly can't force a company with a liquidation value of $13.40 a share into bankruptcy.
If JCP's downward sales spiral was continuing, I would have been out in a flash but such is not the case nor would you expect it to be when the company throws almost $3B into the ring to turn things around.
I have nev er given in to hysterical headlines and panic and at this late stage in my life, I sure don't intend to start doing that now. When I feel that I know the truth as I felt I did in 2002 with Tyco and with JCP now, I will stick it out and be willing to accumulate even horrific losses in order to be there in size at the bottom which is necessary if you are going to come back. In the fullness of time - meaning out about a year, I expect that I will have completely turned around the JCP situation. Remember - I don't own the stock and don't need the company to go back to $15 to recover as would buyers and holders of the stock; just $8 a share a year out puts me nicely ahead. I really do have superior methods and once again I'll be proving it in spades.
In the fullness of time, I'll do infinitely better on my JCP puts than you are doing on your short positions in PCLN. I'll be recovering my losses on my investments but sad to say, you will not be doing the same on PCLN.
Yes - I indeed am taking a bath on the puts in the insane returns portfolio - with losses that at one time exceeded 200K. But I have the courage of my convictions and am sticking it out; I had plenty of reserves to be able to do so by virtue of my out-sized gains on BIDU as well as smaller gains on the quarter-million-dollar long-term put-writing portfolio and also nice profits on the spread portfolio.
BANKRUPTCY - are you kidding me? JCP will have at least $2B IN CASH as of year-end and that cash is almost as much as the entire market cap of the company. Book value after the capital raise is $3.0B and the company has 305 million shares outstanding. But the company's real estate was recently appraised as being worth $1.1B more than the cost basis shown in the ledgers. So even if the company was to fold its tent and simply liquidate, fair net asset value is $4.1B which is about $13.40 a share. And you talk about BANKRUPTCY? Obviously you haven't set eyes on the company's balance sheet.
This was an unprecedented attack by the shorts using the social media. Anyone with a brain would know that the company was essentially FORCED into issuing stock when it really didn't need the money. If anyone has unclean hand here, it's Goldman Sachs - not JCP. Goldman saw fit to lend the company $2.25B in late May based on the new appraisals for the company's real estate. Goldman's research department then came out just four months later on Sept. 25 with a scathing report against the company's debt saying that Penney had borrowed way too much for a company its size. Can you believe it - Goldman willingly lends the company over $2B and then says that Penney borrowed too much? How outlandish!
Who forced Penney to issue more stock when the company said it had all the cash it needed? The ultra-conservative likes of CIT Financial which obviously read the devastating Goldman report and demanded that JCP raise more capital at once and if they didn't, they would cut off financia
I closed my short sale position in PCLN a while back and now have only a few PCLN puts and a few LNKD puts. Can't believe you are comparing your dire situation in JCP with my small and basically meaningless put positions in PCLN and LNKD???