NEW YORK (AP) — J.C. Penney's reassurance that its transformation is on track seems to be calming investors — for now.
The beleaguered department store chain, which had seen its shares in a free fall in recent days, on Thursday sought to appease investors who were worried about the company's cash liquidity and sales following a gloomy analyst report on the company.
The department store chain released a statement on Thursday that it was pleased with its turnaround efforts. CNBC also quoted Penney's CEO Mike Ullman as saying that he doesn't see conditions this year where "we'd need to raise liquidity."
The statements came after Penney shares fell near 13-year lows on Wednesday to close at $10.12. Shares rose 3 percent, or 30 cents, to close at $10.42. Shares surged as much 11 percent earlier in the day. Overall, shares have lost 76 percent of their value since early February 2012.
Wednesday's free fall came a day after a gloomy analysis by Goldman Sachs, which began coverage of Penney's unsecured debt with an "Underperform" rating. In the report, Goldman Sachs analyst Kristen McDuffy wrote she fears that Penney will be forced to tap into the debt markets for more cash. McDuffy also said that she believes that the current and fourth quarter will be difficult, with business likely showing a slower-than-expected improvement.
Reports have been swirling since late last week that Penney is looking to raise more money, possibly through a combination of debt and equity. J.C. Penney's reported search for more capital comes after it arranged a $2.25 billion loan this past spring with Goldman Sachs.