Why Joann Stock Is Falling Sharply

Joann Inc JOAN shares are trading lower by 30.8% to $0.35 during Monday’s session. The stock is falling following a Bloomberg report stating the company is contemplating a bankruptcy filing to restructure its debt and regain financial stability.

Per the report, talks with lenders are underway, aiming for a pre-packaged bankruptcy that would enable a swift Chapter 11 exit while the company continues operating. Joann’s financial struggles stem from liquidity issues and difficulties managing inventory amidst a tough retail climate.

Bloomberg also says the company has sought counsel from financial advisory firms and is addressing high interest expenses and loan payments.

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Should I Sell My Joann Stock?

Whether to sell or hold a stock largely depends on an investor's strategy and risk tolerance. Swing traders may sell an outperforming stock to lock in a capital gain, while long-term investors might ride out the turbulence in anticipation of further share price growth.

Similarly, traders willing to minimize losses may sell a stock that falls a certain percentage, while long-term investors may see this as an opportunity to buy more shares at a discounted price.

Investors may also consider market dynamics. The Relative Strength Index can be used to indicate whether a stock is overbought or oversold. JOAN stock currently has an RSI of 55.51, indicating neutral conditions.

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JOAN has a 52-week high of $3.55 and a 52-week low of $0.34.