JCP Stock Gets Dumped By Top Shareholder … Surprise, Surprise

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

JCPenney185 JCP Stock Gets Dumped By Top Shareholder ... Surprise, SurpriseJCPenney (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.

Endnotes:
  1. JCP: http://studio-5.financialcontent.com/investplace/quote?Symbol=JCP
  2. sprinted for the exits: http://investorplace.com/2013/09/jcp-jcpenney-stock/
  3. JCPenney stock: http://investorplace.com/2013/09/jcp-stock-jcpenney/
  4. secondary offering: http://investorplace.com/2013/09/jcp-stock-secondary-offering/
  5. GS: http://studio-5.financialcontent.com/investplace/quote?Symbol=GS
  6. recent filing: http://www.sec.gov/Archives/edgar/data/919085/000101143813000281/form_sc13da-jcpenney.htm
  7. JCPenney has a liquidation value of just $324 million: http://investorplace.com/2013/09/jcpenney-stock-citigroup-analyst/
  8. The Wall Street Journal: http://blogs.wsj.com/moneybeat/2013/09/27/j-c-penney-options-predicting-more-pain-for-shareholders/

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