JCP Plunges 10% From Open After Cramer's "Amazing Quarter" Blessing, Back To Red

Tyler Durden's picture


When a sophisticated hedge fund manager takes a position in the most senior segment of a failing retail form's capital structure, it is not a bet on recovery: it's a bet on being long the fulcrum security in an upcoming chapter 11, or at worst, on having collateral coverage to cover your exposure in a liquidation Chapter 7... And for anyone who spent more than 2 minutes deciphering this morning's JCP results will know, the cash burn is immense and outweighs any glib PR-strewn headlines that support a positive future. In fact, even the CFO noted he did not see any major trend change in the short-term (i.e. more of the same downtrend?) Of course, that didn't stop CNBC's Jim Cramer from talking it up pre-market (to a 8.9% gain before the bell) as he exclaims in the clip below "this is an amazing quarter... I am positive, the stock will go higher." Well, 60 minutes after retail got their first chance to buy, JCP is down 9% from its open, in the red for the day, and reflecting more closely the dismal reality that credit markets remain convinced of.

Here's Cramer with the 'Buy"...

and the end-result...

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