Just Induct JCP into the Hall of Shame

 | Sep 27, 2013 | 7:53 AM EDT
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You just can't make this stuff up.

This week we were bombarded with the apparent experts telling us the obvious: J.C. Penney (JCP) vendors are getting antsy and the company needs to raise capital in order to provide a cushion and calm nerves. Funny, a lot of this doom and gloom came from the same people telling us JCP was a raging Buy on the way down. And not so funny, the Goldman Sachs doom-and-gloom report warning of the risks of a capital raise was, yes, followed by an announcement the company will sell 84 million shares Goldman will do the deal.

If that doesn't qualify for the Hall of Shame, the company itself is up for a nomination. After the media/analyst/experts had their way with the stock over the past few days by speculating about desperate scenarios like $1 stock floor value, harsher vendor terms, vendors walking away (these were completely logical scenarios) the company itself came out on defense yesterday. JCP issued a statement saying it is "pleased with the turnaround efforts and traction." And they had to throw in online sales are trending up double digits over last year.

Wow. Excuse me for not breaking out into song, but you do remember online sales were NEGATIVE 37.3% last year? In addition the "company still anticipates it will experience positive comparable store sales trends coming out of the third quarter and throughout the fourth quarter." What the heck does that mean? Does it mean comps are positive now or they might be positive on the last day of Q3? On a compare of -26.1% last year, I sure hope comps have a plus sign. But based on last quarter's results, I can't imagine why you would state such a thing in a press release, particularly speculating about Q4. Forget company-specific problems. Have you seen traffic trends in retail lately?

Here is where the award comes in. Within hours of the we-are-fine press release, and with barely enough time for the JCP bulls to go on camera and tell us "see, everything is fine, vendors are cool and no capital raise is necessary," the company announces it will sell 84 million shares. This behavior is pictured under the phrase ZERO CREDIBILITY on Google search. I bet George and Kyle are not so happy right now. Bill, on the other hand, is high fiving himself.

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