JC Penney to end year with £830m cash before 84m share sell off

JC Penney is to end the year with £830m cash, excluding the profits from the retailers 84m share sell off. The news was disclosed in a regulatory filing on Friday after a turbulent week for the troubled company.
Last night JC Penney shares fell by 4.5 per cent in after-hours trading from previous gains of three per cent earlier in the day, after the retailer announced it would be selling 84m shares.
However the underwriters have been offered a 30-day window to buy an additional 12.6m shares which would take the total sale to 96.6 million shares with a value of £620m. The company is selling the shares to raise cash for general purposes. Revenue for the struggling company dropped by as much as 22 per cent in the last year and has not made a profit since 2011.
JC Penney had suffered earlier in the week after a Goldman Sachs note rated the stock as an under-perform. Goldman Sachs, credit analyst, Kristen McDuffy:
In our view, a combination of weak fundamentals, inventory rebuilding, and an underperforming home department will likely challenge J.C. Penney’s liquidity levels in 3Q.
Trouble for the retailer mounted on Thursday when Citigroup slashed its target price for the company from £6.8 to £4.35 a share.
The sell off will also be bad new for investors in the retailer as the share count will increase which will likely lead to a could lead to a corresponding decrease in the stock price. For the year so far JC Penney shares are down 47 per cent