I spend way too much time trying to figure out other people's motivations, which is probably pointless and impossible.
Still, as a general rule of thumb, if it doesn't make sense to me, that's usually a sign that there is something wrong.
Such as Gottshalks building and opening a big box store in Bend at the very beginning of a deep recession.
Must mean they're doing pretty good right? Lots of faith in the local market, heh?
From a site called the Tulare Business Journal:
Gottschalks (Pink Sheets: GOTT) tumbled deeper into penny-stock territory Friday morning after a Chinese company backed out of an agreement that would have given the troubled retailer a cash infusion of up to $30 million.Gottschalks traded as low as 14 cents per share Friday morning, down 69 percent from Thursday’s close of 45 cents. That broke below its previous all-time low of 22 cents per share set Nov. 21.
The latest selloff gave the company, which has annual sales of almost $600 million, a market valuation of less than $2 million.Gottschalks, which operates 59 department stores and three specialty stores in California and five other Western states, has lost $32 million in the past seven quarters, including almost $20 million in the first three quarters of this year, as a result of the tough economy and questionable strategic moves.
Industry analysts are now pondering the immediate future of the retailer. If suppliers who were bolstered by the deal's prospects cut Gottschalks off, it could be forced to begin a liquidation with closure sometime next year, said Howard Davidowitz, chairman of Davidowitz & Associates, a national retail consulting and investment banking firm in New York.
"Gottschalks needs divine intervention," Davidowitz said. "They are in a very tough place."
3 days ago