JCPenney shares are down over 20% this morning in the pre-market...

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...trading below $2 for the first time in its almost 40 year history...

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...after posting a wider-than-expected quarterly loss and disappointing sales. The struggling department-store chain, which has been without a chief executive since May, also lowered its forecast for the year, and now expect a loss.

Chairman Ronald W. Tysoe gave an update on the CEO search in the earnings statement.

“The process is going well and the Board has met with highly qualified candidates who have expressed a strong desire to become the next leader of JCPenney,” Tysoe said. “The hiring of a new CEO is the top priority of the board of directors.”

We wish them luck.

JCP bond yields are now above 14%

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And CDS imply a 65% probability of default (and that is without this morning's move)

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We suspect once trading starts today that JCP will overtake Sears on the CDS deadpool list.