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Fitch on JCP: Watch those CDS spreads

  • Fitch Ratings weighs in on J.C. Penney (JCP -3.8%), taking note of the widening spread on the retailer's five-year credit default swaps.
  • The ratings agency now sees cash burn of $2.8B-$3.0B for JCP this year, much higher than its earlier forecast.
  • Fitch Ratings PR
Comments (12)
  • jawdoc19@gmail.com
    , contributor
    Comments (37) | Send Message
     
    Isn't stock down enough already? Retail investors are screwed, thanks to Goldman sach forced secondary offering.
    24 Oct 2013, 12:43 PM Reply Like
  • Energysystems
    , contributor
    Comments (995) | Send Message
     
    Investors shouldn't have touched JCP with someone else's 10' pole.
    24 Oct 2013, 02:18 PM Reply Like
  • wyostocks
    , contributor
    Comments (7703) | Send Message
     
    Like watching a slow death.
    24 Oct 2013, 12:46 PM Reply Like
  • Marshall Hargrave
    , contributor
    Comments (115) | Send Message
     
    Like a crazy headless chicken perhaps?

     

    http://seekingalpha.co...
    25 Oct 2013, 04:41 PM Reply Like
  • ldeaster
    , contributor
    Comments (85) | Send Message
     
    have you read dreams of doubling my money, makes it sound like JCP management has control of this situation and turn around is just around the corner
    24 Oct 2013, 01:41 PM Reply Like
  • Qniform
    , contributor
    Comments (2494) | Send Message
     
    Didn't sound like that to me. It sounded like every PR department always sounds. What would you expect investor relations to say?
    24 Oct 2013, 09:42 PM Reply Like
  • Qniform
    , contributor
    Comments (2494) | Send Message
     
    Cash burn is a liquidity issue. They have this holiday season to recover, or it's another equity raise - if anyone would even buy...
    24 Oct 2013, 02:30 PM Reply Like
  • ldeaster
    , contributor
    Comments (85) | Send Message
     
    why do they keep having these cash burns, and what if they can't get more cash?
    24 Oct 2013, 04:27 PM Reply Like
  • Qniform
    , contributor
    Comments (2494) | Send Message
     
    Their margins are too low for their overhead. Interest, real estate, salaries all require a higher sales price. But they are lowering prices to clear inventory and drive traffic. If they can't get sufficient cash, then suppliers will not ship - lights out.

     

    Once this cycle starts, it is very hard to stop. I don't think they have the management talent or morale to do it.
    24 Oct 2013, 09:01 PM Reply Like
  • Valuentum
    , contributor
    Comments (1296) | Send Message
     
    Cash burn is $1 billion / quarter...what is Fitch looking at. That's an optimistic forecast.
    24 Oct 2013, 11:02 PM Reply Like
  • Qniform
    , contributor
    Comments (2494) | Send Message
     
    I'm not sure, but I think they are subtracting non-recurring capex. It's supposed to slow down.
    24 Oct 2013, 11:17 PM Reply Like
  • ldeaster
    , contributor
    Comments (85) | Send Message
     
    Qniform
    thanks for the clarification of the cash burns, and I know for a fact the they don't have the mgmt. talent and moral, because they can't give bonuses that causes people to do things that they wouldn't have done before. what is the difference between JOS A. Banks/men's warehouse and JCP?
    25 Oct 2013, 02:42 PM Reply Like
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