In JCP @ 6.56. J C Penney is priced for bankruptcy. The bonds are placing chances of default at 65%. The company has secured it's cash position with an influx of 932 million (30% dilution @11). Buying right now gives you a price 40% below the last major equity infusion. The company is looking for 2 metrics to improve. Better traffic and better conversion September was better than previous months. I am in.

Update on Trades

Yelp fell 9 points after the short (thanks to the debt ceiling issues). Unfortunately, I had mixed success there because I protected my premium on the puts. I still think it's a great long term short but company's can stay overvalued longer than you can stay liquid.

Invested in AOL at 33.8. This will be a really interesting wait and watch. Turns out Jim Cramer did a big song and dance over AOL after the market closed. This one is a turnaround story. While I still think it isn't a "confirmed" turnaround, the company is suffering from it's .com days branding malaise. They have great properties and have a sound strategic direction to move forward. They are also leading google on video ads and the big bet Tim Armstrong is making, is that brand advertising dollars will move to video ads. This seems to be a no brainer in the long run. Brands would want to be more picky about who they show their ads to and online video ads fill that gap in a big way. Company's financials look great. 2.5 billion market cap, around 2.2 B in revenues. I think there is less risk in this investment than many others.

Got out of DXM before the drop. Out of Tumi but now back in big at 19.5. Out of JMI after one month dividend.

YELP short becoming a promising possibility long term. Very important to not have a time restriction on this one as this baby can spin out of control. This would be a valuation short and not a fundamental short.