J.C. Penney Loses a Controller, Will Sell 84 Million Shares
In a busy day for the struggling retailer, J.C. Penneyannounced today that it plans to sell 84 million shares of common stock. It will also allow the underwriters to purchase up to an additional 12.6 million shares. As of the most recent quarter, J.C. Penney had 220 million shares outstanding .
In addition, it disclosed in an SEC filing that Controller Mark Sweeney has left the company. Sweeney had been senior vice president and controller since Sept. 5, 2012. Prior to that, he had worked at General Electric since 1997. As a result of his exit, Dennis Miller, J.C. Penney's former senior vice president and controller, will serve as the interim principal accounting officer. Miller served in that capacity from June 3, 2008 to Sept. 5, 2012.
J.C. Penney also today issued a press release in which it said "it is pleased with its progress thus far in the Company's turnaround efforts and the traction its initiatives are starting to achieve." The company said it is "starting to see greater predictability in its performance across many areas." It said overall sales on jcp.com continue to trend double digits ahead of last year and it anticipates it will experience positive comparable store sales trends coming out of the third quarter and throughout the fourth quarter of 2013. It did not give specifics in the release.
This all comes just one day after a Goldman Sachs bond analyst recommended to investors that they buy credit default swaps (which pay if a company defaults on its debt), sending the stock down 15% in one day. Its stock has fallen almost 50% year to date as it fired CEO Ron Johnson in April. He was replaced by former CEO Mike Ullman. In addition, activist investor Bill Ackman resigned from the board in August.
The Associated Press is reporting Friday that J.C. Penney expects to raise about $810.6 million via the public stock offering. J.C. Penney said Friday it plans to offer 84 million shares priced at $9.65 per share. That is a 7.3% discount to Thursday's closing price of $10.42 per share, the AP reports.
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