NEW YORK (AP) -- J.C. Penney shares dropped to an all-time low on Tuesday as the ailing retailer said there was no truth to chatter that it hired a bankruptcy attorney.
THE SPARK: J.C. Penney spokeswoman Kristen Hays said Tuesday that there was no truth to the rumor that it had hired a bankruptcy attorney. The source of the original rumor is unclear, but Penney's denial was picked up by several media outlets.
THE BIG PICTURE: J.C. Penney has been facing steep sales drops after a failed turnaround attempt spearheaded by former CEO Ron Johnson. Its board ousted Johnson in April after 17 months on the job and rehired the previous CEO, Mike Ullman.
Sales remain sluggish but there have been some glimmers of improvement. Last week the retailer said that a key revenue figure wasn't as bad in September as it was in August. The Plano, Texas, company also said last week it expects to have more than $2 billion in year-end liquidity — a measure of its ready access to cash — after closing on a public stock offering of 84 million shares.
THE ANALYSIS: In a note to investors JPMorgan analyst Matthew Ross said Tuesday that after meeting with management, the company management is "working to correct missteps of the past," including private-label reorganization, and realigning home goods. However, he said there is no clear sense of timing in terms of a sales turnaround. He has a "Neutral" rating on the stock.
SHARE ACTION: Shares fell 63 cents, or 8 percent, to $7.24 in afternoon trading after earlier trading to an all-time low of $7.12, according to FactSet.