This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

J.C. Penney Rumored to Be Seeking Cash: Report

NEW YORK ( TheStreet) - J.C. Penney (JCP - Get Report) is rumored to be looking for more cash, according to a Bloomberg article.

The Plano, Texas-based department store, struggling to jump start a turnaround under the direction of CEO Mike Ullman, is said to be in discussions with hedge funds and other investors under the advisement of Goldman Sachs (GS) about additional fundraising options. Included in the range of possibilities is the company borrowing against its real estate holdings, Bloomberg said.

J.C. Penney's owned and ground-leased real estate is valued at $4.08 billion, said Bloomberg, citing the company's May investor presentation.

Shares fell 1.4% to $12.96 on Friday. The stock fell an additional 1.2% at last check.

Last month, J.C. Penney reported a worse-than-expected net loss of $586 million, or $2.66 a share, in a second quarter chock full of extraordinary charges that pulled the number down. Net sales slumped 12% year over year and gross margin fell to 29.6% in the quarter. The company said it plans to end the year with $1.5 billion in excess liquidity.

The dismal earnings results followed a very public battle with Pershing Square's Bill Ackman who sought to shake things up at board and executive level to speed up J.C. Penney's turnaround. Ultimately, Ackman lost that battle and resigned his board seat. Ackman announced on Aug. 27 plans to sell his entire 18% stake in J.C. Penney.

In the wake of the activist investor headache, J.C. Penney recently adopted a stockholder rights plan in hopes to make it more difficult for anyone to acquire or own more than 10% of the company.

Separately, Vornado Realty Trust (VNO) said Friday that it sold its remaining stake in J.C. Penney for $174 million. In a Securities and Exchange Commission filing, the company said that on Thursday, it sold all 13.4 million common shares in a block trade to Citigroup Global Markets, at a price of $13 per share.

Prior to the sale ( announced last week), Vornado owned 13.4 million shares, or 6.1% of J.C. Penney's stock, worth about $185 million.

J.C. Penney has not yet responded to TheStreet's request for comment on this article.

-- Written by Laurie Kulikowski in New York.
Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
JCP $8.94 0.00%
AAPL $113.29 0.00%
FB $91.01 0.00%
GOOG $630.38 0.00%
TSLA $248.48 0.00%

Markets

Chart of I:DJI
DOW 16,643.01 -11.76 -0.07%
S&P 500 1,988.87 +1.21 0.06%
NASDAQ 4,828.3250 +15.6170 0.32%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs