NEW YORK (TheStreet) -- For J.C. Penney (JCP) investors, it's a life of heartache. Just when things are looking up, the stock takes a turn for the worse and dives. That was Thursday's story when the retailer's shares fell 8.4% to $8.85 on trading volume nearly double its average. In trading Friday, the stock was falling a further 3.8% to $8.52.
On Thursday evening, the retailer disclosed it had received a letter of inquiry from the U.S. Securities and Exchange Commission regarding its financial position. The letter, received on Oct. 7, requests information on liquidity, debt and details on the public stock offering it announced late September.
"The company is cooperating with the Securities and Exchange Commission in regards to its inquiry," J.C. Penney said in a recent SEC 10-Q filing.
Mid-week, the bruised-and-battered department chain posted a pleasing double-digit comparable sales gain of 10.1% in November. On second glance, however, the figures weren't as strong as they seemed when taking into consideration that in the same period a year earlier comparable sales dropped 34%.
Also hurting investor sentiment, hedge fund manager J. Kyle Bass told Bloomberg he had sold his stake in the Plano, Texas-based business. As of September, the Bass-run hedge fund Hayman Capital Management held 11.4 million shares, or a 5.2% stake, in the company.
Over the year, management has struggled to return the company to profitability, and in November, investors grew more confident a turnaround was taking root, causing shares to trace higher. The enthusiasm is proving short-lived as J.C. Penney's challenges seem insurmountable against major brick-and-mortar and online retailers such as Macy's (M) and Amazon (AMZN).