Let's face it, this trade took courage. Titan investor
is making a social proclamation of faith not only in the J.C.
Penney Company (
) but by extension, America, and the way things were and could
be. After all, J.C. Penney stores have come to own a level of
intangible goodwill in the American psyche, reflecting back a
social ethos of a very democratic American Dream.
Today's mega-buy makes
the fourth largest stakeholder in J.C. Penney Company Inc. (
) with a 7.9%1 stake in the deeply down department store chain.
J.C. Penney's top stakeholder is William Ackman's Pershing Square
Capital Management, with a 17.8% stake and the major
embarrassment of his recent J.C. Penney vision gone wrong.
of Soros Fund Management bought 17,386,361 shares of JCP, as of
April 15, 2013. His price range was $14.39 per share. This new
holding impacts his portfolio by 4.94%. JCP is down 58% over 12
months but suddenly spiked 7% to $16.13 today after the news
's Pershing Square Capital Management owns 39.1 million JCP
shares of the ailing company. About two years ago, it was
Ackman's master plan to push out then-CEO Myron "Mike" Ullman and
replace him with Ron Johnson of Apple Inc. fame. The vision was
to save J.C. Penney by refocusing the retailer with name-brand
clothes at lower prices, with no promotional coupons. The company
soon discovered that customers wanted to play the coupon game
instead of "everyday low-low prices." As a result sales fell
faster, and Ackman's choice executive was fired after being CEO
for only 17 months.
The company's turmoil produced a revolving door effect that
whirled former and now-current CEO Myron "Mike" Ullman back in,
much to the chagrin of Ackman. After the firing of his choice
Johnson, it was obvious that Guru Ackman's plan had "Ackfired."
Unless J.C. Penney Company Inc. has huge real estate assets like
Sears, it appears that Ackman is left holding the bag of 39
million shares of a possibly washed up company run by the
"frenemy" CEO he had pushed out to hire Ron Johnson.
Ackman's holding history shows a losing streak since he first
bought JCP for 15 million shares in third quarter of 2010. As of
the end of 2012, his average cost of shares for 39,075,771 shares
was $29 per share with a 47% loss.
Here's a look at JCP's Net Income:
J.C. Penney insider trading shows that CEO Ullman's 27,000 shares
are off by 60.16% since he traded in 2008.
Various sources say that the company is talking with banks on how
to raise funds and turn the company around, yet again.
We've all heard of drama queens, but among top hedge fund
managers, there are drama kings, too, like George Soros and Bill
Ackman whose ethereal billionaire playing field is just as rough
as everyone else's, maybe rougher. The hedge fund drama kings
know the art of sending non-verbal messages, but who can really
name the cause or the motive of Guru actions with any accuracy?
With Ackman in the spotlight of so much controversy, Soros has
begun to pull money out of Ackman's fund. Only the guru knows if
Soros' recent moves are related to Ackman's bets on his own JCP
misadventure or the heated Herbalife (
) strife, but Soros Fund Management has been withdrawing "several
hundred million dollars from Bill Ackman's $12.5 billion Pershing
Square Capital Management" over the past few months, according to
the Wall Street Journal.
In January 2013, billionaire George Soros spoke to CNN about his
outlook for the global economy. Soros also discussed his views on
what is needed to put the U.S. economy on the higher growth path,
and said "...The U.S. outlook is best among all the major
With this recent trade, George Soros stands at the crossroads
where business intersects with heart, where investing intersects
with believing in the Great Invisible. This is where a true Guru
shines because he represents the collective and he bets on the
dream. After all, the giant department stores that we grew up
with were places of magic.
What will become of the emblematic J.C. Penney stores in the
Only the guru knows.
For now, billionaires, belly up to the bar and decide the future
of where and how we shop.
George Soros of the Soros Fund Management has a portfolio of 179
stocks with a total value of $8.36 billion, and a
quarter-by-quarter turnover of 19%.
George Soros top buys, sells and holdings,
Here is the complete portfolio of George Soros.
Also check out:
1. George Soros's Undervalued Stocks
2. George Soros's Top Growth Companies
3. George Soros's High Yield stocks
4. Stocks that George Soros keeps buyingAbout GuruFocus:
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