Ackman Throws In His Soiled JCPenney Towel

Finally, the annoying soap opera appears to be over

   

Bill Ackman must have been jealous that Miley Cyrus was stealing all the headlines Sunday — so he stole them back Monday afternoon.

The high-profile hedge fund manager announced that Pershing Square is selling its entire stake of struggling department store JCPenney (JCP). Not that anyone who has followed the Ackman-JCP showdown should be surprised. A quick rundown:

  • Ackman disclosed his 39 million-share stake — good for 18% of the company — in October 2010.
  • The “activist” investor then brought in former Target (TGT) and Apple (AAPL) retail star Ron Johnson to turn around the company in Nov. 2011.
  • Johnson eliminated sales and coupons, alienated customers, tried to bring sales back, then eventually got fired.
  • Former chief Mike Ullman — who was CEO for seven years before Johnson — took the reins again.
  • Ackman threw a temper tantrum earlier this month, demanding that Ullman be replaced within 30 to 45 days.
  • The board wasn’t having it, and told Ackman he was not just “disruptive and counterproductive” but also “integrally involved” in events that have caused JCPenney’s demise.
  • Ackman quit the board shortly after.
  • Now he is selling his stake, which has lost around half of its value.

Better late than never, I guess.

Of course, while the brouhaha between Ackman and JCP might finally have reached an ending, both the investor and the retailer still have big losses to overcome.

Ackman’s other big headline-inducing investment of late was his short of Herbalife (HLF) — a stock that has doubled since he began ripping on it. The two public flops caused Ackman to write a letter to investors last week admitting a few failures that began with a section titled “Mistakes.”

Meanwhile, JCPenney posted an ugly wider-than-expected loss last week, along with its ninth straight drop in quarterly sales. And the stock — which has suffered a 46% haircut during the past 12 months — opened lower today following Ackman’s disclosure.

After the sale, Perry Capital — which owns 16 million shares — will become the largest shareholder … and hopefully the Ackman headlines (and the Miley ones, for that matter) will die a slow, quiet death.

As of this writing, Alyssa Oursler did not hold a position in any of the aforementioned securities.


Article printed from InvestorPlace Media, http://investorplace.com/2013/08/bill-ackman-jcpenney-jcp-towel/.

©2014 InvestorPlace Media, LLC

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