Ackman Not Giving Up on JCPenney (JCP)...Yet
Get Alerts JCP Hot Sheet
Join SI Premium – FREE
Following the ousting of Ron Johnson as CEO of retailer JCPenney (NYSE: JCP) earlier this week, some have been wondering whether or not hedge fund giant Bill Ackman, of Pershing Square, will stick with his massive investment in the company. Ackman, after all, pushed for current CEO Mike Ullman to be replaced in 2011, but the results have been unsatisfactory.
Ullman ran JCPenney from 2004 through 2011.
The NY Post said Wednesday that Ackman is likely to work to turn JCPenney around amid the company weakness. He holds an 18 percent stake in the company, according to the latest market data.
Ackman is no stranger to the real estate business. He has previously worked with names like Wendy's (NYSE: WEN) and Target (NYSE: TGT) to mount a turnaround, cutting costs and building cash in the process.
JCPenney might weigh a plan which would pledge the company's real estate in exchange for a loan to keep it afloat while changes are being made. Sources told the Post that while JCPenney's real estate might be worth over $1 billion, the company might be able to collateralize less than half of that amount.
With shares of JCPenney down by more than half since the end of 2011, it's not clear how much more pain Ackman can take. Then again, he might have gone into the stake willing to lose the whole thing. No risk, no reward, as the saying goes.
Into the open Wednesday, shares of JCPenney are indicated lower.
Ullman ran JCPenney from 2004 through 2011.
The NY Post said Wednesday that Ackman is likely to work to turn JCPenney around amid the company weakness. He holds an 18 percent stake in the company, according to the latest market data.
Ackman is no stranger to the real estate business. He has previously worked with names like Wendy's (NYSE: WEN) and Target (NYSE: TGT) to mount a turnaround, cutting costs and building cash in the process.
JCPenney might weigh a plan which would pledge the company's real estate in exchange for a loan to keep it afloat while changes are being made. Sources told the Post that while JCPenney's real estate might be worth over $1 billion, the company might be able to collateralize less than half of that amount.
With shares of JCPenney down by more than half since the end of 2011, it's not clear how much more pain Ackman can take. Then again, he might have gone into the stake willing to lose the whole thing. No risk, no reward, as the saying goes.
Into the open Wednesday, shares of JCPenney are indicated lower.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Alibaba's (BABA) Ant Group Appoints Han Xinyi as President - Reuters
- META vs. GOOGL stock: Analyst explains which one you should own
- Trian Sends Letter to Fellow Disney Shareholders Outlining the Need for Change
Create E-mail Alert Related Categories
Hedge Funds, Insiders' Blog, Management ChangesRelated Entities
William Ackman, Pershing Square Capital, Hedge FundsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!