JCPenney CEO Mike Ullman is having communication issues with Wall Street.
Shares of the embattled retailer on Friday capped a weeklong slide of 30 percent, hitting their lowest levels in 27 years on heavy trading as the Plano, Texas, company’s boss denied he had misled investors this week about a massive stock offering.
Ullman told a gathering of investors in New York on Wednesday that the retailer had no near-term plans to raise capital to shore up its finances, saying Penney this fall expects to reverse a sales slide that has spurred steep losses, according to sources.
“We don’t see conditions for the rest of the year where we’d need to raise liquidity,” he told the group, according to an attendee of the meeting, which was hosted by investment bank Sterne Agee.
Separately, on Thursday, CNBC reported that Ullman told investors Penney “does not see conditions for the rest of the year where it would need to raise liquidity.” The business cable channel said Ullman added that the company “will see how it does in the fourth quarter.”
Nevertheless, Penney only hours later announced it was raising $932 million in a stock offering — and then denied Ullman ever waved off the likelihood of such a move.
“The media articles published on Thursday which contain quotation from Mr. Ullman about a capital raise are not accurate and do not reflect any recent comment by Mr. Ullman,” according to a statement late Thursday.
Penney officials on Friday, Wall Street sources said, told analysts and investors a slightly different story in response to queries — namely that Ullman may have made the comment but that it was taken out of context and he had left open the possibility of a near-term capital raise.
“That’s not what I heard, and not what anybody else heard,” an investor countered, saying that Ullman closed the Wednesday discussion by signaling that such a deal wouldn’t be considered before the fourth quarter.
A Penney spokesman didn’t immediately respond to a request for comment on the retailer’s Friday communications with the Street.
Ullman was meanwhile doing damage control with Penney employees, saying in an internal memo Friday that the retailer had no urgent need for the cash infusion.
Instead, Ullman blamed the surprise equity offering on “rumor and speculation” that was “creating undue concern regarding our financial situation and had the potential to harm our corporate reputation,” according to a copy of the memo reviewed by The Post.
With the added cash, Ullman said Penney now expects to end the year with more than $2 billion. But excluding the infusion, the company said in a Friday filing that it expects to end the fiscal year with $1.3 billion, down from an Aug. 20 estimate of $1.5 billion.
The equity offering was priced at $9.65 a share, exposing buyers to a paper loss of more than 6 percent on the day as the shares tumbled 13 percent, to $9.05, on trading volume of 256 million — exceeding the retailer’s total share count of 220 million.