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Stock Market & Financial Investment News

News Breaks
January 28, 2014
08:37 EDTJCPJ.C. Penney amends stockholder rights plan to protect tax benefits
J. C. Penney announced that its board of directors has acted to protect the company's valuable net operating loss carryforwards, or NOLs, by amending and extending the company's existing stockholder rights plan. The company has over $2B in NOLs, which can be used in certain circumstances to offset future taxable income and reduce federal income tax liability. The company's ability to use its NOLs would be substantially limited if an "ownership change" under Section 382 of the Internal Revenue Code were to occur. Ownership changes under Section 382 generally relate to the cumulative change in ownership among stockholders with an ownership interest of 5% or more over a rolling three year period. The amended rights plan was adopted by the Board to reduce the likelihood of an "ownership change" occurring. The amendments to the company's rights plan include extending the plan's expiration date from August 20, 2014 to January 26, 2017, and lowering the beneficial ownership threshold for a person or group to become an "acquiring person" under the plan from 10% to 4.9%. Under the amended rights plan, if any person or group acquires 4.9% or more of the outstanding shares of common stock of the company without the approval of the Board of Directors, there would be a triggering event causing significant dilution in the ownership interest of such person or group. However, existing stockholders who currently own 4.9% or more of the outstanding shares of common stock will trigger a dilutive event only if they acquire additional shares, subject to specified exceptions. The purpose of the amended rights plan is to protect stockholder value by preserving the company's ability to fully use its NOLs and the amended rights plan is similar to plans adopted by other public companies with significant net operating losses, J.C. Penney said.
News For JCP From The Last 14 Days
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June 30, 2015
15:20 EDTJCPMoody's raises J.C. Penney liquidity rating to SGL-1 from SGL-2
Moody's Investors Service revised J.C. Penney's rating outlook to positive from stable. Moody's also affirmed the company's Caa1 Corporate Family Rating, and raised the company's Speculative Grade Liquidity rating to SGL-1 from SGL-2. "The rating outlook revision to positive from stable reflects Moody's view that JC Penney's operating performance has shown signs of improvement as a result of better merchandising, cost controls, and integration of its online business" said Moody's Vice President Scott Tuhy. He added, "we have seen positive momentum building for the company to achieve $700M to $800M of adjusted EBITDA, a level in which earnings would fully cover cash flow and interest". The upgrade in the Speculative Grade Liquidity rating primarily reflects the company's improved operating performance as we expect free cash flow to be near break-even levels and the company's meaningful cash balances are sufficient to cover expected seasonal working capital needs.
June 24, 2015
10:26 EDTJCPStocks with call strike movement; TWTR JCP
Twitter (TWTR) December 40 call option implied volatility increased 1% to 44, J.C. Penney (JCP) November 20 call option implied volatility decreased 5% to 42 according to IVolatility.

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