Why JC Penney Short Interest Is Up by 8 Million Shares

By Douglas A. McIntyre Updated Jan 12, 3:25PM EST · Published Jan 28, 9:15AM EST

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Pessimism about brick-and-mortar retail likely caused an 8 million share short interest surge in J.C. Penney Co. Inc. (NYSE: JCP) for the two-week period that ended on January 13. The retailer is considered among the most troubled in the industry.

The number of shares short in J.C. Penney totaled 79 million, which is a very high 24% of the float.

J.C. Penney’s shares trade at $6.38, a 52-week low, against a period high of $11.99. The retailer’s stock collapse is partly due to deep concern about the entire sector. Bad news about Target Corp. (NYSE: TGT) and downgrades across most of J.C. Penney’s direct competitors have helped push shares lower.

J.C. Penney itself was recently hit with a downgrade. According to MarketWatch:

Credit Suisse turned bearish on the department store chain, citing expectations of limited sales growth amid store closures and stagnant apparel and accessories merchandising. Analyst Christian Buss cut his rating to underperform from neutral.

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In an article in American Business Journal. CEO Marvin Ellison said:

For the record, I think that 1,014 stores for J.C. Penney is too many, because we haven’t made the necessary investments in our store fleet the way we should. It’s a simple question: If we have a location that I wouldn’t want my children to work at, or wouldn’t want my wife to shop at, then we’re going to invest capital and ask if it fits the brand standard.

Wall Street is betting against him and his plan, so he better get going.

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About the Author Douglas A. McIntyre →

Douglas A. McIntyre is the co-founder, chief executive officer and editor in chief of 24/7 Wall St. and 24/7 Tempo. He has held these jobs since 2006.

McIntyre has written thousands of articles for 24/7 Wall St. He is an expert on corporate finance, the automotive industry, media companies and international finance. He has edited articles on national demographics, sports, personal income and travel.

His work has been quoted or mentioned in The New York Times, The Wall Street Journal, Los Angeles Times, The Washington Post, NBC News, Time, The New Yorker, HuffPost USA Today, Business Insider, Yahoo, AOL, MarketWatch, The Atlantic, Bloomberg, New York Post, Chicago Tribune, Forbes, The Guardian and many other major publications. McIntyre has been a guest on CNBC, the BBC and television and radio stations across the country.

A magna cum laude graduate of Harvard College, McIntyre also was president of The Harvard Advocate. Founded in 1866, the Advocate is the oldest college publication in the United States.

TheStreet.com, Comps.com and Edgar Online are some of the public companies for which McIntyre served on the board of directors. He was a Vicinity Corporation board member when the company was sold to Microsoft in 2002. He served on the audit committees of some of these companies.

McIntyre has been the CEO of FutureSource, a provider of trading terminals and news to commodities and futures traders. He was president of Switchboard, the online phone directory company. He served as chairman and CEO of On2 Technologies, the video compression company that provided video compression software for Adobe’s Flash. Google bought On2 in 2009.