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Ackman's Pershing Square Lost Over $400M in J. C. Penney (JCP) Bet Gone Bad

August 28, 2013 6:07 PM EDT
A prospectus after the close showed Citigroup agreed to purchase Pershing Square's 39,075,771 shares of J. C. Penney (NYSE: JCP) common stock at $12.60 per share, which is a discount of $0.30 per share from the price to the public of $12.90.

Before expenses, Pershing Square received proceeds of $492,354,715 from the sale, or 45% below the $903,093,762 paid for the shares.

Pershing Square also held swaps providing additional economic exposure to approximately 15,969,239 notional shares. It is unclear how much was paid for the swaps.

All in all, Bill Ackman admitted that J. C. Penney was one of his three "mistakes" and has vowed to stay away from retail names (his other two mistakes were retailers Target and Borders). The hedge fund manager hopes to put the J. C. Penney nightmare behind him and focus on his winners and not-so-much winners (NYSE: HLF).


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