Kmart share price falls for 2nd day after downgrade

Posted 8:49AM on Friday 4th January 2002 ( 22 years ago )

TROY, Mich. - Kmart Corp.'s share price has fallen 25 percent over two days after a key analyst downgraded the retailer's stock and said it might face bankruptcy. The company's stock closed Thursday at $4.09 a share, down 14 percent from Wednesday's close of $4.74 on the New UYork Stock Exchange. At one point Thursday, the price fell to $3.89 a share. On Wednesday, Prudential Securities analyst Wayne Hood reduced his forecast for Kmart's fourth-quarter earnings and recommended that investors sell the stock. "It created a pandemonium and a market fear that, quite frankly, is unwarranted," Gary P. Giumetti, president of McTevia & Associates in Eastpointe told The Detroit News. Kmart "has restructured its debt efficiently. It's not in default of payment terms. ... The situation is not dire." Kmart shares debuted in 1976 at $36.50. The stock's trading volume Thursday was 35 million, compared with a daily average of 4.9 million shares. The share price's 52-week high was $13.16 on Aug. 7. The share price fell 72 cents, or 13 percent, on Wednesday. The $1.37 drop over two days shaved 25 percent from the stock's value. In a Dec. 18 memo to store managers, Kmart said they "must achieve maximum payroll efficiency," the Detroit Free Press said. The company told them to further cut their staffs after eliminating temporary holiday positions. The memo said managers should adhere to the company standard of 75 percent part-time and 25 percent full-time workers.

http://accesswdun.com/article/2002/1/200647