Pacific Sunwear Killed By Bloomberg Bankruptcy Prep Report

Shares of Pacific Sunwear of California, Inc. (NASDAQ: PSUN) plunged nearly 40 percent early Tuesday morning following a report by Bloomberg the company is preparing to file for Chapter 11 bankruptcy.

The Boston Globe, citing Bloomberg's report, noted that a Chapter 11 filing could come as early as next week. The publication added that Pacific Sunwear has recorded losses every fiscal year dating back to 2008.

Shares of Pacific Sunwear of California have plunged nearly 90 percent over the past year.

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The Street's Brian Sozzi commented that Pacific Sunwear's bankruptcy announcement "should be little surprise," as the company has "struggled to connect with teens opting for trendy and cheap fashion pieces from H&M and Forever 21, instead of the company's more expensive looks inspired by California lifestyles."

"PacSun, as it is called by consumers, had little momentum headed into the holiday season, with same-store sales falling 3 percent at its over 600 stores and the company recording a net loss of $3.4 million in the third quarter," Sozzi wrote. "The company had a mere $11 million in cash at the end of the third quarter, and was predicting another loss for the holidays."

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