Ackman sells JC Penney stake at a loss
28 Aug 2013
Controversial hedge fund manager William A Ackman, who held roughly 18 per cent stake in JC Penney Co, has sold it at $12.90 a share on Monday. The stock sale came six days after the retailer announced its latest quarterly earnings.
With this, he severed all ties with the retailer.
The move comes two weeks after Ackman resigned from JC Penney's board as part of a deal to resolve an unusually public battle between the activist investor and the retailer
In a letter to investors last week, Ackman said his investment in JC Penney was a ''failure'' and that retail ''has not been our strong suit.
Ackman's stake was valued at $504 million, saddling him with a loss of about $473 million from what he paid for it.
The hedge fund manager's demand for a faster search for a new CEO has led to a fight at the retailer's board over its future on Thursday.
According to the company board, Ackman was being ''disruptive and counterproductive'' (See: JC Penny board in fight over CEO appointment)
According to the filing with the Securities and Exchange Commission, Pershing Square Capital Management's Ackman acquired about 39.1 million shares of JC Penney in 2010, he paid about $25 per share at that time.
Earlier, he went public with statements saying he had lost confidence in JC Penney's board and that chairman Thomas Engibous should be replaced.
According to S&P Capital IQ, Pershing Square Capital had been the top single investor in the firm, holding nearly 18 per cent of the shares outstanding.
According to analysts, the investment firm founded by George Soros now owns roughly 9 per cent stake, while Perry Capital holds 16 million shares, or 7.3 per cent of shares outstanding.
