JCPenney Sued By Shareholder Over $810 Million Stock Sale and 2 Other Hot Stocks to Watch
J.C. Penney & Co. (NYSE:JCP): Current price $8.86
On Tuesday, a J.C. Penney shareholder sued the historic retailer over its surprise move to issue over $810 million of stock to reinforce liquidity, causing a sharp drop in its share price. Alan Marcus said that J.C. Penney had publicly assured its investors in August and September that business was improving and that did not need to raise capital, and then subsequently agreed to sell 84 million common shares at $9.65 each.
Marcus further accused the company of knowing that it did not have sufficient liquidity for the holiday season without raising new cash, and that it hid this to avert raising worries among its vendors. The plaintiff also said that when the facts became public, investors “hammered” the share price, including on Friday, when it plummeted by 13.1 percent.