Weekend newspaper reports forced JJB to issue a statement confirming it might raise more cash through a share placing and open offer.
The retailer, which is also considering more disposals and an extension of its working capital facility, is understood to want about £50m.
Separately, JJB was hit by claims that chairman Sir David Jones had borrowed £1.5m from arch-rival Mike Ashley, founder of Sports Direct, raising concerns about a potential conflict of interest.
KBC Peel Hunt’s John Stevenson said: “JJB’s current management team is arguably the strongest the business has seen in terms of retail experience. However, any turnaround plan remains limited by the group’s ongoing £25m working capital facility.”
He said that if new equity were raised, the discount would need to be “significant in order to compensate for the size of the task ahead”.