Pier 1 Imports, Inc. engages in the retail sale of decorative accessories, furniture, candles, housewares, gifts, and seasonal products. It offers decorative accents and textiles, such as rugs, wall decorations and mirrors, pillows, bedding, lamps, vases, dried and artificial flowers, baskets, ceramics, dinnerware, candles, fragrances, gifts.
Pier 1 Imports Inc. shares tumbled as much as 24% after reporting a seventh straight quarter of declining sales as its interim chief tries to make its turnaround plan work.
Same-store sales, an important measure for retailers, fell 13.5% in the first quarter. Results were dragged down by “aggressive clearance actions to move through lower-priced, lower-margin goods,” Interim Chief Executive Officer Cheryl Bachelder said.
When you look at the chart of Pier 1 Imports, one would say it’s going to zero.
However, on June 19th, Pier 1 Imports, Inc. announced a reverse stock split at a ratio of 1-for-5, 1-for-10 or 1-for-20. The reverse stock split will enable Pier 1 to regain compliance with the NYSE minimum share price continued listing rule and maintain its listing on the NYSE.
NOTE: A reverse stock split or reverse split is a process by which shares of corporate stock are effectively merged to form a smaller number of proportionally more valuable shares. In this case a 1 for 5 would turn the stock price from over $7 to over $35.
So just like in May when Pier 1 Imports gave sellers an opportunity to short the stock, Pier 1 will be the gift that keeps on giving because it’s not going to $1, but you will get the opportunity to short it again.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.