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JCP - JC Penney

farnamstreet

By farnamstreet
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BargainValueHunter Newbie

BargainValueHunter

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http://www.telegram.com/article/20130821/NEWS/308219731/1002

 

Bass is joined by Bruce Berkowitz, the head of Fairholme Capital Management LLC in Miami, which disclosed that the $257 million Fairholme Focused Income Fund bought J.C. Penney bonds with a face value of $11 million during the second quarter, according to a Fairholme filing with the U.S. Securities and Exchange Commission this month.

 

I'd bet that Bruce B. is absolutely loading up on these cheap bonds during this JCP liquidity "crisis".

 

GGP 2.0?

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muscleman Newbie

muscleman

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What price are the bonds right now?

 

Go here: http://finra-markets.morningstar.com/BondCenter/Default.jsp

 

Select "corporate"

 

Type "Penney" into issuer name

 

You can also see trade history by clicking into a specific bond.

 

Is there any info about the seniority of the bonds, and which collaterals do they use? Is SEC filings for JCP common stock the only place to look for these info?

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cogitator99 Newbie

cogitator99

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PLANO, Texas (Sept. 27, 2013) - J. C. Penney Company, Inc. (NYSE: JCP) (the "Company") announced today that the previously announced underwritten public offering of 84.0 million shares of its common stock priced to the public at $9.65 per share.  The Company intends to use the net proceeds from the offering for general corporate purposes.  The offering is expected to close on October 1, 2013, subject to certain customary conditions.

 

The Company has granted the underwriters a 30-day option to purchase up to an additional 12.6 million shares of common stock.

 

Goldman, Sachs & Co. served as the sole book-running manager for the offering.

 

***

 

So GS helps JCP to get a significant loan...then writes a negative report on JCP's credit...then arranges a share sale. Huh.

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ItsAValueTrap Newbie

ItsAValueTrap

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So GS helps JCP to get a significant loan...then writes a negative report on JCP's credit...then arranges a share sale.

 

Isn't that how investment banking should work in an ideal world?  Analysts should be independent and not be tainted by pressures from underwriters or other areas of investment banking.  And investment banks should do underwriting deals that make sense for the company selling the shares and the people buying the shares.  There is a win-win element in avoiding a costly bankruptcy process.

 

Of course... Goldman constantly gets fined for inappropriate behaviour.  I can't believe I'm defending them.

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cogitator99 Newbie

cogitator99

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So GS helps JCP to get a significant loan...then writes a negative report on JCP's credit...then arranges a share sale.

 

Isn't that how investment banking should work in an ideal world?  Analysts should be independent and not be tainted by pressures from underwriters or other areas of investment banking.  And investment banks should do underwriting deals that make sense for the company selling the shares and the people buying the shares.  There is a win-win element in avoiding a costly bankruptcy process.

 

Of course... Goldman constantly gets fined for inappropriate behaviour.  I can't believe I'm defending them.

 

Well let's hope that it really was independent behavior...yeah it's kind of funny that you're defending them. ;) 

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ItsAValueTrap Newbie

ItsAValueTrap

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I think JCP has better management.  When Ullman ran JCP, it was profitable.

 

SHLD has been losing money.

 

In retail, I think that management is the most important factor.  When Rose Blumpkin left Nebraska Furniture Mart, it fell into shambles.  If you look at a lot of retailers historically, the big changes in a retailer usually happen around changes in the CEO.

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krazeenyc Newbie

krazeenyc

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I don't understand why people are buying JCP. If they are betting a turnaround in this sector, isn't SHLD a more attractive buy?

 

From a retail perspective I think people think it's much easier to turn around -- given that they were doing OK (not great b4 Ron Johnson joined).  Also I think the biggest factor is that nobody can "take control" of Sears from ESL and re-direct the company.

 

 

I think the leaps are pretty expensive. (Consider that when Sears was sitting at $40 a share a month ago, the 60 leaps were trading at under $2.50)

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bmichaud Newbie

bmichaud

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Post share offering, JCP's July quarter-end numbers look as such:

 

Net Working Capital: $7.54 (current assets minus current liabs, while admittedly not giving a haircut to inventory)

PP&E Equity: $2.95 (Net PP&E minus LTD)

 

Might be kind of interesting around NWC getting the real estate equity for free.

 

Though I'm sure the wily Sanjeev is already buying down here this morning  8)

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muscleman Newbie

muscleman

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Post share offering, JCP's July quarter-end numbers look as such:

 

Net Working Capital: $7.54 (current assets minus current liabs, while admittedly not giving a haircut to inventory)

PP&E Equity: $2.95 (Net PP&E minus LTD)

 

Might be kind of interesting around NWC getting the real estate equity for free.

 

Though I'm sure the wily Sanjeev is already buying down here this morning  8)

 

As of last Q, current assets is 5B and current liabilities is 3.5B. Capital raise is only 0.8B. So how did you get the NWC to be 7.5B?

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Guest hellsten

Guest hellsten

Posted
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I was trying to look for information about JCP's turnaround/reinvention, and the very similar stock crash, that JCP went through in the early 2000s. Anyone have any information on it?

 

The only thing I could find was this:

http://www.kirkpalmer.com/pdfs/GoldmanSachsRetailingForum.pdf

 

Evaluating management talent in the retail industry.

 

Based on a speech by Kirk Palmer, president of Kirk Palmer &

Associates, a leading executive search firm focusing on the retail

and apparel industries, delivered at the Goldman Sachs Forum

for Investors in Retailing, on September 4, 2001.

 

 

A focus on management

 

Evaluating management talent within the retail industry is critical for investors in retailing

seeking to make quality investment decisions.

 

Evaluating the business life cycle

 

Investors must identify where a company resides on the continuum of the business life cycle,

from the “start-up” to the “reinvention” phases, and all stages in between.

 

Management needs evolve along different stages of the business life cycle

 

Managers in “front-end” functions—marketing, merchandising, and stores—are most

critical in the “growth,” “extension,” and “reinvention” phases, while “back-end”

functions—finance, inventory management, and logistics, among others—are most critical

in the “maturation” and “turnaround” phases.

 

Three essential factors in evaluating management

 

Three criteria transcend life-cycle stages and functional roles: leadership, interpersonal

skills, and track record. The most critical leadership skills include creating and

communicating a vision that is easily understood and motivates others into action.

 

On hiring from outside the retailing industry

 

We see upside to the acquisition of talent from other industries, but highlight one chronic

risk.The retail industry operates with a “ready, fire, aim” mentality, driven by a desire to be

“first to market.” Not everyone who comes from businesses outside of retail can deal with

the pace and the culture of retail.

 

Sears, JCP and The Gap are listed in the presentation.

 

Maybe we should speculate about how many divisions of JCP are in the start-up phase ;D

Start-up

 

First is the start-up phase: it’s the idea, the business model, and the initial execution.

These are usually the first five to twenty stores, and these companies are seldom on

public investors’ radar screens in this phase. In fact, most are not public, although

public companies often have divisions that are in this phase.

 

Growth

 

Next comes the growth phase. This is the sexy phase, where everyone wants to be. This

is where investors tend to make a lot of money . . . or lose a lot of money, depending

on whether a “nothing” company becomes a “something” company.

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fareastwarriors Newbie

fareastwarriors

Posted
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http://dealbook.nytimes.com/2013/09/30/perry-capital-cuts-stake-in-j-c-penney/?_r=0

 

Perry Capital Cuts Stake in J.C. Penney

 

 

On Aug. 9, Perry Capital disclosed for the first time that had acquired a 7.3 percent stake in the company. By Monday, its stake was just 3.3 percent, according to a filing with the Securities and Exchange Commission.
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xtreeq Newbie

xtreeq

Posted
Posted

http://dealbook.nytimes.com/2013/09/30/perry-capital-cuts-stake-in-j-c-penney/?_r=0

 

Perry Capital Cuts Stake in J.C. Penney

 

 

On Aug. 9, Perry Capital disclosed for the first time that had acquired a 7.3 percent stake in the company. By Monday, its stake was just 3.3 percent, according to a filing with the Securities and Exchange Commission.

 

http://www.sec.gov/Archives/edgar/data/919085/000101143813000281/form_sc13da-jcpenney.htm

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