JCP Stock 2013 Timeline – Penney’s Race to the Bottom

UPDATE: JCPenney just announced that it is cooperating with a Securities and Exchange Commission inquiry into its liquidity, cash position, debt equity financing and secondary offering. 

jcp-stock-jcpenney-stockIt’s been yet another wild year for JCPenney (JCP) — and not in a good way. While 2012 was bad for investors in JCP stock, 2013 was even worse. The reeling retailer continued down a bumpy road to the bottom.

In case you forgot, Ron Johnson — a former retail star at Target (TGT) and Apple (AAPL) — was pulled on board in November 2011 to save the age-old department store.

To be blunt, he failed miserably. Sales at JCPenney fall 25% in 2012, and JCP stock plummeted by about 45%.

A fresh year didn’t help JCPenney stock get its groove back, either. Shares of JCP stock had been regaining a bit of momentum in recent months, but they got yet another haircut yesterday. Investors were unimpressed by the company’s second-straight month of improving same-store sales, and were disappointed by the increase in overall sales.

All in all, shares of JCP have lost over half of their remaining value so far in 2013. In fact, the damage to the company’s share price (and subsequently its market cap) was so bad that a beaten-down JCP stock actually got booted from the S&P 500 a few weeks back.

Some of the biggest one-day moves and most important announcements from the last year are marked on the JCPenney stock chart below. Scroll down to find out what JCP stock news had investors making moves — usually for the door.

jcp-stock-jcpenney-stock-chart1. Jan. 29: The first big move for JCP stock in 2013 came as CEO Ron Johnson attempted to remedy his biggest mistake of 2012: getting rid of sales. Remember, Johnson wanted to wean customers off of coupons and introduce a new “simpler” pricing scheme. Instead, he weaned Penney customers off of shopping at the store period, with many heading to rivals like Macy’s (M) and Kohl’s (KSS). And so, on Jan. 29 — nearly a year after Ron Johnson vowed to axe sales in the first place — JCPenney announced that it would resume promotions.
Aftermath: JCP stock gained more than 9% on the news.

2. Feb. 28: The upward momentum in JCPenney stock didn’t last long, though. Investors were reminded of just how much damage the no-sales policy had already done when the department store released its fourth-quarter and full-year earnings after the bell on Feb. 27. In Q4 alone, Penney lost $552 million — more than six times the loss it tallied the same period a year prior. On top of that, annual sales plunged by more than $4 billion and made for the retailer’s worst full-year sales number in over two decades.
Aftermath: JCP stock got hammered hard, falling 17% the next morning and racking up a loss of 32% during the next five days.

3. April 9: That loss likely was the catalyst for this next bit of JCP stock news: the CEO switcheroo. Late on April 8, news broke that Ron Johnson was getting the boot after his disastrous 17 months on the job. Johnson’s predecessor, Mike Ullman, was handed back the reins.
Aftermath: JCP stock holders were skeptical at first, sending shares down 12% on April 9. After that initial drop, though, JCPenney stock regained the lost ground and then some, gaining 20% in a month and a half.

4. April 26: The aforementioned spring run for JCPenney stock was fueled largely by some good activist investor news. Namely, famed investor George Soros revealed that he had snagged an 8% stake in JCP stock.
Aftermath: Investors were quick to follow Soros’ lead and sent shares up 12% in one day.

5. May 16: Once again, though, the harsh reality of JCPenney earnings cooled off the stock’s mini-momentum. First-quarter earnings released in mid-May showed that, George Soros support aside, things weren’t looking much better at the department store. Penney posted another loss and a 19% decline in same-stores sales for the first quarter of 2013, and also eliminated its dividend.
Aftermath: JCP stock sank around 4% as a result.

6. July 31: More bad news for JCP stock came later in the summer. On July 31, The New York Post ran an exclusive saying that the still-struggling department store was suffering from a credit clampdown and subsequent supply chain issues. That made many investors in JCPenney stock nervous to say the least.
Aftermath: Shares of JCP fell 10% when the exclusive was released, and had lost a total of 20% by the time the first week of August was in the books.

jcp-stock-jcpenney-stock-chart

7. Aug. 26: This next piece of JCP stock news was a long-time coming. If we rewind just a bit, we recall that high-profile hedge fund manager Bill Ackman, who runs Pershing Square, disclosed an 18% stake in JCPenney in October of 2010 and was central to the hiring of Ron Johnson. Even after the Johnson hire turned into a tire fire, Ackman threw a hissy fit at the re-hiring of Ullman. In August, he demanded that Ullman be replaced. When the JCP board basically told Ackman to shove it, he quit the board and sold his stake not long after.
Aftermath: JCP stock only fell 3% after Ackman bailed, bringing that chapter of the soap opera to an end.

8. Sept. 25: While Bill Ackman got pounded for his investment in JCPenney stock, things start to get really ugly after he crawled off with his tail between his legs. In fact, shares of JCP plummeted around 46% in the three weeks or so after Pershing threw in the towel. One big driver in that drop came in late September, when analysts said the back-to-school shopping season sucked at Penney.
Aftermath: JCP stock suffered a 15% one-day haircut on the news.

9. Sept. 26: Of course, chatter about a weak back-to-school season also coincided with chatter that JCPenney was nearing bankruptcy. Management denied that JCP would need to raise more funds before doing just that. Penney announced on Sept. 26 that it was planning a secondary offering.
Aftermath: The unexpected (but also unsurprising) offering sent shares of JCP stock lower 13%. Meanwhile, experts say the offering — which closed Oct. 1 — diluted JCPenney stock by 30%.

10. Oct. 21: In the fall, it seemed that JCPenney stock basically continued to slide on any news, as most of it centered around bankruptcy rumors and the fact that there remained little evidence of a turnaround. One such example came after Mary Ross-Gilbert, an analyst at Imperial Capital, put a $1 price target on JCP stock on Oct. 21.
Aftermath: Shares plummeted 8%. After that drop, JCP stock had been sliced in half since early September. The good news: JCP finally found a bottom after this fall.

11. Nov. 7: By early November, JCPenney stock had already been regaining some ground since touching its low of $6.42 — a level not seen in decades. And when management released an update on the JCP turnaround, that upwards momentum got a nice boost. Same-store sales rose 0.9% in October from the month prior, although they still fell 4% year-over-year.
Aftermath: Shares of JCP jumped 6% on Nov. 7 when Penney posted its first monthly sales gain in almost two years. The jump brought JCP gains to 16% since the stock’s late-October low, even as the broader market was flat over the same period.

12. Nov. 20: While JCPenney stock fell after its first two earnings reports in 2013, investors were apparently numb to bad news by the time Q3 results rolled around. In late November, JCPenney posted not just another loss, but another wider-than-expected loss.
Aftermath: Still, investors bid JCP stock up almost 9% after the earnings report. The result: Shares of JCPenney had booked a 35% run since their recent low. Of course, JCP stock is still missing half the value it sported when 2013 kicked off.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, https://investorplace.com/2013/12/jcp-stock-jcpenney-2013/.

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