JCP - JC Penney

[gg]

Perry is a highly successful, multi-strategy hedge fund that's been around since the early 90s (maybe even late 80's). Have probably only had 1 or 2 down years in the 20 year history, and compounded annual returns in the 12-15% range. Some of their other succesful event-driven investments have included Barney's (where I believe the converted a massive distressed debt stake into a controlling equity position) and Yahoo.

 

Definitely a positive for equity holders to have them involved

[Luke 532]

Some of their other succesful event-driven investments have included Barney's (where I believe the converted a massive distressed debt stake into a controlling equity position) and Yahoo.

 

Definitely a positive for equity holders to have them involved

 

And Questrom is with Barneys.  I would imagine Perry has talked with him about the possibility of working with JCP.

[fareastwarriors]

http://www.bloomberg.com/news/2013-08-12/soros-said-to-support-j-c-penney-ceo-in-ackman-feud.html

 

 

Soros Said to Support J.C. Penney CEO in Ackman Feud

 

[Luke 532]

JC Penney to Name New Director in Effort to Resolve Ackman Dispute

http://online.wsj.com/article/SB10001424127887324769704579009582613317934.html

 

[fareastwarriors]

http://www.bloomberg.com/news/2013-08-13/j-c-penney-says-ackman-resigned-from-company-s-board.html

 

 

 

Ackman Quits J.C. Penney Board With $700 Million Loss

 

[fareastwarriors]

http://www.reuters.com/article/2013/08/14/us-jcpenney-bonds-insight-idUSBRE97D04320130814

 

 

Insight: JCPenney's 100-year bonds swoon amid retailer's turmoil

 

[fareastwarriors]

http://www.bloomberg.com/video/investor-bill-ackman-on-jc-penney-board-resignation-XEfSuVOhSSylm_Ac4gvRjA.html

 

Bill Ackman  on Charlie Rose

[dcollon]

Thanks for posting the video.

[Luke 532]

McCormack increased his position in JCP by 60%, the fund now holds 5.42 million shares of the company.

 

http://www.valuewalk.com/2013/08/coatue-buys-apple-inc-aapl/

[Myth465]

Very good interview with Charlie Rose.

Ackman came out alright.

[fareastwarriors]

http://www.breakingviews.com/bill-ackmans-plate-spinning-act-gets-dangerous/21101854.article

 

Bill Ackman's plate-spinning act gets dangerous

[meiroy]

http://www.bloomberg.com/news/2013-08-20/kyle-bass-said-to-bet-on-j-c-penney-comeback-with-loan-purchase.html

 

"Hedge-fund manager J. Kyle Bass is betting on a comeback by J.C. Penney (JCP) Co., the retailer roiled by falling sales and a dispute with investor William Ackman, according to a person familiar with the matter.

Bass, who focuses on corporate turnarounds, has accumulated a long position in J.C. Penney over the past two weeks by buying the company’s secured loans, said the person, who asked not to be named because the information is private. He has also sold a type of insurance called credit-default swaps to other investors that pays off only if the Plano, Texas-based company defaults on its debts, an event he considers unlikely, said the person."

 

[tooskinneejs]

From the Breaking Views "plate-spinning act" article:

 

"J.C. Penney is a mess much of Ackman’s own making. His handpicked chief executive turned out to be a disaster."

 

One of my pet peeves is when people try to rewrite history.  Johnson wasn't a disaster.  The "disaster" was the Board signing on to Johnson's plan and then not letting it be fully carried out.  The Company was dying a slow death before Johnson was hired.  At least he tried to do something to prevent it.  He cut waste at HQ and he started to modernize the stores and merchandise.  I think this company will now slowly go the way of Sears, a place where fewer and fewer people want to shop and for whom time is the worst enemy.

[JSArbitrage]

From the Breaking Views "plate-spinning act" article:

 

"J.C. Penney is a mess much of Ackman’s own making. His handpicked chief executive turned out to be a disaster."

 

One of my pet peeves is when people try to rewrite history.  Johnson wasn't a disaster.  The "disaster" was the Board signing on to Johnson's plan and then not letting it be fully carried out.  The Company was dying a slow death before Johnson was hired.  At least he tried to do something to prevent it.  He cut waste at HQ and he started to modernize the stores and merchandise.  I think this company will now slowly go the way of Sears, a place where fewer and fewer people want to shop and for whom time is the worst enemy.

 

Are you serious? Ron Johnson blew JCP the f&@k up.  I read an article that stated the QoQ drop in SSS was the largest in retail history.  Their cash position was such that vendors were threatening to cut financing.  He is basically the Jon Corzine of retail at this point.

[tooskinneejs]

Choice A: Short term pain for long term gain.

 

Choice B: Long term pain.

 

Johnson attempted Choice A.  The Board cut off his legs in the 7th inning and went back to Choice B.  JCP will now go the way of Montgomery Wards.  This is fine, as long as the Board and investors understand and accept their long term fate.

[rainman]

http://www.bloomberg.com/news/2013-08-20/kyle-bass-said-to-bet-on-j-c-penney-comeback-with-loan-purchase.html

 

"Hedge-fund manager J. Kyle Bass is betting on a comeback by J.C. Penney (JCP) Co., the retailer roiled by falling sales and a dispute with investor William Ackman, according to a person familiar with the matter.

Bass, who focuses on corporate turnarounds, has accumulated a long position in J.C. Penney over the past two weeks by buying the company’s secured loans, said the person, who asked not to be named because the information is private. He has also sold a type of insurance called credit-default swaps to other investors that pays off only if the Plano, Texas-based company defaults on its debts, an event he considers unlikely, said the person."

 

I am curious how to buy this secure loans. Do they have symbol ?  Which broker can buy this?

[fareastwarriors]

http://www.cnbc.com/id/100977976

 

Ackman: 'Retail has not been our strong suit'

[fareastwarriors]

Ackman Defends Record, Says May Choose to Exit Penney

 

 

http://blogs.wsj.com/moneybeat/2013/08/21/ackman-defends-track-record-herbalife-position-in-letter-to-investors/

[Myth465]

Ackman seems to make every retail investment not about the retail operations, but more about the hidden assets.

Seems a bit dangerous.

[valuecfa]

I bought the 15's this week.  ~25% return over two years if the company survives til mid 2015

[texual]

I don't believe JCP got blown up by Johnson. He controlled the store remodel at a pace that was really fast. But it also meant having most of the store look under construction or not available for customers to purchase. It took two full years for the stores to go through the major hardship of being converted. I thought after a period of time it would stabilize and customers would return to the stores. It also allowed them to make incremental upgrades after big name brands and layouts were installed. Anyways that is in the past. It is unlikely JCP can survive being halfway in the midst of a transformation  that no longer has its visionary running it. Good luck to JCP. Never owned a share, don't plan on ever owning one either.

 

But it is a sad situation especially since I actually loved the upgraded stores and the way it was coming together. I hope Johnson finds a place he can work that has a more financially savvy owner/operator that would allow him to work some magic, under tighter control.

[Luke 532]

Poison pill...

http://ir.jcpenney.com/phoenix.zhtml?c=70528&p=irol-newsArticle&ID=1849242&highlight=&source=email_rt_mc_body&app=n

Plano, Texas (August 22, 2013) - J. C. Penney Company, Inc. (NYSE: JCP) (the "Company"), today announced that its Board of Directors has adopted a stockholder rights plan.  The plan, which has a term of one year, is designed to protect against any potential future use of coercive or abusive takeover techniques and to help ensure that the Company's stockholders are not deprived of the opportunity to realize the full and fair value of their investment.  The plan, which was adopted following evaluation and consultation with the Company's outside advisors, is similar to plans adopted by the Company in the past and by numerous publicly traded companies. 

 

The plan, which was not adopted in response to any effort to acquire control of the Company, will continue in effect until August 20, 2014, unless the rights are redeemed or exchanged for shares of common stock by the Company on an earlier date.

 

In connection with the adoption of the stockholder rights plan, the Company's board of directors declared a dividend of one right for each share of the Company's common stock held by stockholders of record as of the close of business on September 3, 2013.  Initially, these rights will not be exercisable and will trade with the shares of the Company's common stock.  Under the plan, these rights will generally be exercisable only if a person or group becomes an "acquiring person" by (i) acquiring beneficial ownership of 10% or more of the Company's common stock or, in the case of any person (including such person's affiliates and associates) that beneficially owns 10% or more of the Company's outstanding common stock, upon the acquisition of additional shares by such person, or (ii) commencing a tender offer or exchange offer which, if consummated, could result in a person owning 10% or more of the Company's common stock.  The term "acquiring person" will not include certain affiliates of Pershing Square Capital Management, L.P. or certain affiliates of Vornado Realty Trust so long as such party's beneficial ownership is permitted under such party's letter agreements with the Company.

 

If a person or group becomes an acquiring person, each right will generally entitle the holder, other than the acquiring person, to acquire, for the exercise price of $55.00 per right, shares of common stock (or, in certain circumstances, other consideration) having a market value equal to twice the right's then-current exercise price.  The Company's Board of Directors may redeem the rights at a price of $0.001 per right at any time up to ten days after a person becomes an acquiring person. 

 

Stockholders are not required to take any action to receive the rights distribution.  Until the rights become exercisable, outstanding stock certificates (or, in the case of shares reflected on the direct registration system, by the notations in the book-entry account system of the transfer agent for the shares) will represent both shares of the Company's common stock and the rights.  The issuance of the rights will have no dilutive effect and will not impact reported earnings per share for the Company.

[usdtor05]

Apologies but the language of the poison pill confuses me. Mechanically I own 1,000 shares let's say.

 

I would be able to exercise those for $55,000 and receive stock worth $110,000?

 

If the stock is actually trading at say $10 upon a buy-out offer, would that mean that I would pay for 5,500 shares but receive 11,000 shares?

[dcollon]

From NewYorker: When Shareholder Activism Goes Too Far

 

http://www.newyorker.com/online/blogs/currency/2013/08/when-shareholder-activism-goes-too-far.html

 

[MYDemaray]

I thought Pershing's most recent letter was a good companion piece to that article.  Shows the other side: http://www.scribd.com/doc/161808954/Pershing-Square-Second-Quarter-Investor-Letter-Bill-Ackman