by Christopher Freeburn | December 6, 2013 10:18 am
Shares of JCPenney (JCP) tumbled more than 5% in Friday morning trading after the struggling retailer revealed that federal regulators are looking into its financing.
The company said that, in October, the Securities and Exchange Commission (SEC) requested that it turn over data pertaining to its “liquidity, cash position, and debt and equity financing.” The SEC is also interested in JCP’s “underwritten public offering of common stock.” The retailer maintains that it is cooperating with the probe, Bloomberg notes.
In September, JCP said it would sell up to $932 million in new shares. The move diluted shareholder stakes, resulting in a number of lawsuits by investors, who claim that the company misrepresented its liquidity position.
JCP has attempted to reverse its sinking fortunes for several years. Earlier this year, it ousted former CEO Ron Johnson, whose “no sales” strategy proved disastrous.
The company has recently been the subject of bankruptcy rumors, which sent its shares down sharply.
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