(This article originally appeared at 11:29 a.m. ET today on Real Money, our premium site for active traders. Click here to get great columns like this from Jim Cramer and other writers even earlier in the trading day.)
Nearly 34% of J.C. Penney's shares were sold short this week, up from about 26% ahead of the company unveiling a major restructuring plan on Feb. 24, according to Bloomberg data. Shorting a stock is a wager on a further decline in value.
To be sure, the market has good reason to position for J.C. Penney shares adding to their 34% loss so far this year.
In the wake of a disappointing holiday season, J.C. Penney will close 138 stores by the second quarter. The closures represent 13% to 14% of the company's current store base and less than 5% of annual sales. They have a negligible impact on net income. J.C. Penney said same-store sales at the locations were "significantly below" the remaining store base and operate at a much higher expense rate due to poor productivity.
Just in the past few weeks, Wall Street has seen bankruptcy filings from sporting goods retailer Gander Mountain, RadioShack successor General Wireless Operations, everyday value price department store operator Gordmans Stores (GMAN and appliances, electronics and furniture retailer HHGregg (HGG . Children's apparel retailer Gymboree has cautioned it was running low on cash and may not survive. Women's apparel retailer Bebe (BEBE is reportedly exploring the closure of all its stores, and instead solely focusing on selling clothes online. Payless Shoesource (PSS , a seller of cheaply made shoes, may be on the verge of a bankruptcy filing of its own.
Shares of J.C. Penney fell 0.7% to $5.59 on Wednesday.