JC Penney stock is now down almost 7%, this time after news that the ailing retailer has hired lawyers to deal with shareholder lawsuits.
The stock's bouncing around $7.30.
Here's why it's taking a beating:
Last month, JC Penney announced a public offering of 84 million shares at $9.65. Why do you do that? To raise cash.
However, on an investor conference call in August, JC Penney said they were liquid, and expected to have $1.5 billion in cash by the end of the year.
Some shareholders are upset about this and have initiated potential claims against the company. Yesterday, the news broke that JC Penney has hired lawyers to deal with that.
And what do lawyers cost? Money.
Check out the full press release below (via Yahoo Finance):
NEW YORK--(BUSINESS WIRE)--Kirby McInerney LLP announced today that it has been retained by an investor in JCPenney Company, Inc. (“JCPenney” or the “Company”) (JCP) to investigate possible claims against the Company for securities law violations on behalf of all persons or entities who purchased JCPenney common stock during the period from August 20, 2013 through September 26, 2013.
On an August 20, 2013 investor conference call, JCPenney’s CFO stated that the Company expected $1.5 billion in liquidity at year-end. However, on September 26, 2013, JCPenney announced a public offering of 84 million shares of its common stock, and the next day, the Company priced the offering at $9.65 per share. On this news, JCPenney stock declined from $10.42 to $9.05, a 13% decline. Since that time, the stock has continued to decline.
Certain JCPenney investors have charged that the statements by the Company and/or certain of its officers during the above-referenced period violated the federal securities laws and caused injury to investors. If you acquired JCPenney common stock during this period and you are interested in learning more about this matter and any rights you might have with respect to these claims, contact Jess Kelley at email@example.com, by telephone at (212) 371-6600, or by filling out this form. Please bear in mind that some of these rights may be time-sensitive.
Kirby McInerney LLP is a New York-based plaintiffs’ law firm concentrating in securities, whistleblower, antitrust and consumer litigation. The firm has specialized in complex litigation, including securities class actions, for several decades. Kirby McInerney LLP has repeatedly demonstrated its expertise in this field, and has been recognized by various courts that have appointed the firm to major positions in consolidated and multi-district litigation. The firm’s efforts on behalf of shareholders in securities litigation have resulted in recoveries totaling billions of dollars, and the firm’s achievements and quality of service have been chronicled in numerous published decisions. Additional information about the firm or the claims against JCPenney can be found at Kirby McInerney LLP’s website: http://www.kmllp.com.
Kirby McInerney LLP
Jess Kelley, 212-371-6600
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