Boston, MA 10/01/2013 (wallstreetpr) – J.C. Penney Company, Inc (NYSE:JCP) has abridged its end cash reserves projections for the year 2013. The company has decided to issue $1 billion in new shares and on this news, the stock fell 13.15% on Friday. The company has a total market capitalization of $2 billion and around 39.34 million shares were traded in the last 30 days and around 0.256 million shares on Friday after the news.
New shares offering by J.C. Penney
According to J.C. Penney, out of $1 billion new shares offering, 84 million have been priced at $9.65 per share and the underwriters have an opportunity to buy an additional 12.6 million shares. After all the discussions about different options viable for raising cash for the company, the company’s board decided to sell the shares on Thursday. As of September 6, the firm had a total debt of around $5.82 million according to the stock offering prospectus and this clearly indicates that raising cash through this huge debt is a difficult option.
Unsuccessful strategies
Myron Ullman, the chief executive for J.C. Penny stated that the company could not jeopardize the associates confidence and risk losing supplier partners. Myron also said that the company was deeply troubled about the truth that the shares were near to the break point level and selling some new stocks was the only option feasible to ease the rising pressure. The former Chief Executive, Ron Jhonson also tried to improve the sales for the company but all his attempts was in vain and in 2012, the shares sank by a shocking $25.
For the past three days, the shares for J.C. Penny have been on a roller-coaster ride, there was a plunge after the research from Goldman and an additional plunge after the Reuters capital rising related reports but after the share sale announcement, the shares again rose and performed well.
