J.C. Penney starts offering of 84 million shares

J.C. Penney Co Inc said on Thursday it had begun a public offering of 84 million shares of its common stock and would use the net proceeds for general corporate purposes.

Shares fell 5.7 percent to $9.83 after hours.

Earlier on Thursday, shares rose as much as 10.9 percent after the company issued a statement that said it expected sales to improve for the rest of the year. On Thursday evening, the company did not return several requests for comment about the public offering.

Reuters reported on Wednesday that Penney was looking to raise as much $1 billion in new equity to build up its cash reserves during its turnaround.

The company currently has 220.6 million outstanding shares, and a market value of 2.2 billion, according to Reuters data.

Sales last year fell 25 percent after Penney got rid of coupons and brought in new, trendier merchandise that did not appeal to long time shoppers.

(Reporting by Phil Wahba in New York; Editing by Carol Bishopric)