Shares in J.C. Penney Company, Inc. (JCP) fell close to 5 percent Monday as the embattled stock continued to crater. The company’s most recent struggles appear connected to reports on Friday evening that the company would be trying to raise more cash despite having already taken out $2.25 billion in loans earlier this year. All told, J.C. Penney’s off 37 percent since the start of the year and over 65 percent since the start of 2012.

New Money Raise Raises Concerns

A Monday morning report from Bloomberg citing unnamed sources that the major brick-and-mortar retailer was in talks with Goldman Sachs (GS) about pulling together a new influx of cash. J.C. Penney went to Goldman Sachs for the $2.25 billion loan that it took out earlier this year. This may be a reaction to rising projections for the company’s Q3 losses, initially expected to be $0.80 per share. Now, estimates have the company losing more than double that amount.

UBS (UBS) analysts Michael Binetti and Steven Strycula saw the potential new effort to raise cash as cause for concern:

“On its 2Q earnings call (08/20), [J.C. Penney] told investors it planned to end FY13 with $1.5 billion of liquidity ($1.2 billion cash + $300 million of undrawn credit facility). In our view, another potential capital raise suggests that [J.C. Penney] is still struggling to win back its wayward consumer—and could signal that 3Q traffic and SSS trends have not improved much despite a return to traditional merchandise and heavy couponing,” they said. “…[J.C. Penney] may need to raise as much as $1 billion of new capital given we expect $1.1 billion in cash burn 1Q14-3Q14. If JCP raises $1 billion through debt (risky, considering [J.C. Penney’s] already elevated fixed costs) at 6.5%, we calculate $65 million of additional interest expected (another $0.20 dilutive to our ’14E EPS est of -$2.58). Alternatively, in an equity scenario, if JCP raises $1 billion at a 10% discount to Friday’s close (85 million shares at $11.70), it could dilute FY14E EPS by $0.63 (39% equity dilution).”

Rough Day for Retail

J.C. Penney’s sliding share price represented the leader of several retail stocks that were down Monday. Dillard’s, Inc. (DDS) gave back over 2 percent, Sears Holding Corporation (SHLD) shed just over 1 percent, and Kohl’s Corporation (KSS) was down just under 1 percent.