J.C. Penney's share price has fallen dramatically over the past year as investors became increasingly skeptical of the effectiveness of the company's new strategy. The CEO has been fired with new managers moving in to try to resuscitate this struggling company. Earlier this month, J.C. Penney drew down $850 million from its credit line to buy inventory in order to replenish stores as well as fix their home-improvement division. Just Monday it announced that it has received a commitment for an additional loan of $1.75 billion.
Many in the investment community are actively questioning whether J.C. Penney can continue as a viable business given their current difficulties. With sales falling and market share dropping at an alarming pace, it's right to wonder if this company will survive.
After a stock has dropped 50 percent, it's easy to cheer a headline that says the company has soared 11 percent. But, of course, if you invested in that asset 3 years ago it would be a much different story; you might disagree that the word "soar" actually paints an accurate picture of what's happening at this company. So as you can see the interpretation of language used really depends on the perspective from which you are viewing the language and interpreting the message.
One could certainly say the same for headlines surrounding other companies including Apple and so many other companies. I mean really, when did selling 38 million iPhones become so "disappointing"? Its semantics and expectation and one needs to recognize that the perspectives have bias and are rooted in a certain expectation.
So as you read headlines, try to recognize that the text provided does not always tell the whole story because of space constraints or time issues. There is often so much more to know about the iceberg than can be determined by looking at the tip you see above the surface of the ocean. Headlines and brief articles can't be relied upon to tell the whole story; you must dig deeper.