The Children’s Place (NASDAQ:PLCE), a specialty retailer of children’s apparel and accessories, skyrocketed by more than 100% at the time of writing after issuing a shareholder update regarding its financing woes.
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The company stated that Snowball Compounding and parties related to Mithaq Capital own around 54% of its outstanding shares. PLCE added that these investors intend to nominate 11 people to the company’s Board of Directors at its 2024 Annual Meeting of Shareholders. The company will enter into discussions with Mithaq for the provision of financing to assist with its liquidity needs.
Mithaq’s unsolicited acquisition of PLCE shares has triggered a “Change of Control.” Based on the company’s credit agreement, this means that it has now defaulted on its debt. Nevertheless, the company is in talks with lenders for a waiver to resolve this problem.
Last week, PLCE was on shaky ground after the company flagged liquidity concerns. As of February 3, the specialty retailer had a total liquidity of around $45 million. This includes $13 million of cash and cash equivalents and around $32 million under its credit facility.
What Is the Stock Price Target for Children’s Place?
Over the past year, PLCE has plunged by more than 15%. Only three analysts have covered PLCE stock over the past three months, assigning two Holds and one Sell. The average PLCE price target of $14 implies a downside potential of 63.2% at current levels.
