JC Penney Shares Fall After-Hours on Chatter of Secondary

Shares of J.C. Penney

fell over 5% in Monday's after-hours session, trading below $16. J.C. Penney had been down for most of the day, ultimately closing at $16.74, for a loss of about 5%. The company had been squaring off with Macy's

in court over the right to carry Martha Stewart-brand products. But in Monday's after-hours session, talk of a secondary offering appeared to spook shareholders. Seabreeze Partners'

, “There is a rumored 10 million share seller in JCP after the close.” CNBC later reported, citing sources, that Deutsche Bank would price 10 million shares in a secondary offering between $16.40 and $16.60. J.C. Penney shares have been plummeting since the company reported poor earnings last week: Same-store sales fell over 30% on a year-over-year basis, and the company lost nearly $1 billion in fiscal-year 2012. The company still has about $1 billion in cash left on its balance sheet, and financing for another $3 billion. But if Ron Johnson's turnaround effort continues to flounder, real questions about J.C. Penney's longer-term viability might surface.