Children's Place Preparing Bankruptcy Filing as Early as Next Week
PLCE is trading near its 52-week low of $0.357 (6.8% above the low) on elevated volume (21× avg).
Summary
Bloomberg reports Children's Place is preparing to file for bankruptcy protection, possibly as early as next week, and is soliciting bids either to keep the business running or to liquidate. Sources said existing shareholders will likely be wiped out. The company has burned cash for six straight quarters and needed repeated lifelines from largest shareholder Mithaq Capital — including drawing the final $25 million under its commitment letter on September 30th, exhausting that $40 million facility. It also added restructuring expert Elizabeth LaPuma to the board on October 8th and handed CFO John Szczepanski a $550,000 retention award on October 23rd, both consistent with a company bracing for a restructuring. With the stock at $0.38 and a market value under $10 million, equity is essentially a call option on a rescue bid that the reporting says is unlikely to leave anything for shareholders.
At the time of this announcement, PLCE was trading at $0.38 on NASDAQ in the Trade & Services sector, with a market capitalization of approximately $9.4M. The 52-week trading range was $0.36 to $9.56. This news item was assessed with negative market sentiment and an importance score of 10 out of 10. Source: Seeking Alpha.