Bill Ackman Dumps J.C. Penney Stake ~ market folly

Friday, August 30, 2013

Bill Ackman Dumps J.C. Penney Stake

If you missed it, Bill Ackman's hedge fund Pershing Square Capital Management has dumped its stake in retailer J.C. Penney (JCP) according to an amended 13D filed with the SEC. 

Ackman offloaded the shares to Citigroup, who in turn will sell them to other investors.  Dow Jones reported that Citi offered the shares between $12.50 and $12.90.

Pershing had previously owned 18% of the company and it looks like they'll lose ~$400 million on the trade.  To walk through Ackman's thinking on his JCP decision, you can check out Pershing Square's Q2 letter which gave hints that he was leaning toward selling.

Some investors have called Ackman's sale a 'capitulation' of sorts and a potential contrarian signal for the stock to head higher, but then you also have to consider that it would still be a bet on the company's fundamentals.

Ackman was also recently interviewed by Charlie Rose.

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