Can J.C. Penney Stop the Bleeding?

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After posting a new 52-week low on Wednesday, Thursday’s premarket trading in shares of J.C. Penney Co. Inc. (NYSE: JCP) ticked up a little. The company issued an announcement this morning that says it is “pleased with its progress thus far in the Company’s turnaround efforts.” Gee, that’s swell.

The press release also says that J.C. Penney “still anticipates it will experience positive comparable stores sales trends coming out of the third quarter and throughout the fourth quarter of 2013.” Considering how poor the company’s sales were in the latter half of last year, that is not all that encouraging.

The company’s problem is liquidity. It has to keep borrowing in order to keep the lights on. And the price investors in J.C. Penney’s bonds have to pay virtually guarantees few takers. According to a report at Reuters, it now costs $2.2 million upfront and $300,000 a quarter to insure a $10 million J.C. Penney bond against default. That works out to a probability of default near 65%. Raising more cash with those kinds of numbers could be next to impossible.

Shares are down nearly 5% in the first few minutes of trading Thursday morning, at $9.57, a new 52-week low that is sure to go lower. The 52-week high is $27.00.