JCP Stock Gets Dumped By Top Shareholder … Surprise, Surprise

by Alyssa Oursler | October 1, 2013 11:26 am

J.C. Penney (NYSE:JCP)JCPenney (JCP[1]) shareholders have sprinted for the exits[2] in the past week or so, and that number now includes hedge fund and top shareholder Perry Capital dumping JCP stock.

Perry Capital was one of a few hedge funds that took the bull defense for struggling JCPenney stock back in August, right around the time Bill Ackman of Pershing Capital stopped holding his breath for a JCP turnaround.

But as JCPenney stock[3] was whittled down ever further last week — thanks in large part to an unexpected secondary offering[4] underwritten by Goldman Sachs (GS[5]) — Perry Capital whittled its JCP bet down as well. A recent filing[6] shows the fund ditched nearly half of its JCP stock holdings in late September.

For fans of the retailer searching for a bright spot in the recent spiral of JCP news, optimism is getting harder and harder to find. JCPenney stock opened to gains of around 3% this morning, but even today’s mini-recovery for JCP has already dwindled to 1% range.

And that’s a drop in the bucket considering shares of JCP stock touched their lowest level since 1982 at one point yesterday, and that JCPenney has lost 30% of its value in the past five days alone. Things only get uglier as you zoom out on JCP. Year-to-date losses are 55%, while 12-month losses are close to 65%.

Really, you can find negativity almost everywhere you look:

Perhaps most damning of all is that even JCP shoppers don’t seem eager to give JCPenney another shot. Sales are expected to drop by another 7% this year.

The result: JCP is expected to post a loss of $6.16 per share — 75% wider than the ugly loss the retailer took a year ago.

If so, you’d have to wonder how much longer Perry Capital’s remaining stake will last.

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

  1. JCP:
  2. sprinted for the exits:
  3. JCPenney stock:
  4. secondary offering:
  5. GS:
  6. recent filing:
  7. JCPenney has a liquidation value of just $324 million:
  8. The Wall Street Journal:

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