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JCP - JC Penney


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It would strike me as insider trading to sell out a large stake in a company right before the company announces significant bad news.  I am not sure how he would be unaware of what the company is doing a week or 2 after resigning from the board.  Therefore I would be surprised to see any major negative news anytime soon.  But what do I know.

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It's funny how CNBC is reporting that he's already sold his stake, while in reality they have only put out a prospectus offering up his stake for sale.

 

edit:

Just saw that they also put in a poison pill a couple of days ago through a rights offering, which may have instigated Ackman's exit.

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Guest wellmont

It's funny how CNBC is reporting that he's already sold his stake, while in reality they have only put out a prospectus offering up his stake for sale.

 

edit:

Just saw that they also put in a poison pill a couple of days ago through a rights offering, which may have instigated Ackman's exit.

 

i believe citi is underwriting the whole thing at just under $13.

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I'm actually going through all the video interviews with Bill Ackman when he talks about JCP starting in 2010. Just look at his conviction! That face! The smugness!

 

I'm Loving it.

 

 

Bill Ackman is really something else. I'm glad he might finally accept that retail isn't a place for him to invest in. Maybe he will start hoarding the remaining SHLD shares this quarter for kicks.

 

 

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I'm actually going through all the video interviews with Bill Ackman when he talks about JCP starting in 2010. Just look at his conviction! That face! The smugness!

 

I'm Loving it.

 

 

Bill Ackman is really something else. I'm glad he might finally accept that retail isn't a place for him to invest in. Maybe he will start hoarding the remaining SHLD shares this quarter for kicks.

 

http://www.reuters.com/article/2013/08/15/uk-hedgefunds-filings-jcpenney-idUSLNE97E00O20130815

 

Soros bought a lot of JCP stocks. This is a bit weird. Why would he buy JCP instead of SHLD? Much lower valuation in terms of price/sales, and also SHLD has the trophy properties that JCP doesn't have.

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I'm actually going through all the video interviews with Bill Ackman when he talks about JCP starting in 2010. Just look at his conviction! That face! The smugness!

 

I'm Loving it.

 

 

Bill Ackman is really something else. I'm glad he might finally accept that retail isn't a place for him to invest in. Maybe he will start hoarding the remaining SHLD shares this quarter for kicks.

 

http://www.reuters.com/article/2013/08/15/uk-hedgefunds-filings-jcpenney-idUSLNE97E00O20130815

 

Soros bought a lot of JCP stocks. This is a bit weird. Why would he buy JCP instead of SHLD? Much lower valuation in terms of price/sales, and also SHLD has the trophy properties that JCP doesn't have.

 

Soros invests...err soon to be invested with Ackman.

 

http://finance.yahoo.com/news/soros-fund-withdrawing-money-pershing-185602361.html

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Anybody think it's ironic that the strategy of stores-within-stores that JCP was trying to pull off with RJ's vision worked for Best Buy, whose stock has tripled from its lows, while JCP remains depressed.

 

Seems like he was in fact the retail genius that many of us gave him credit for - just didn't have the discipline to slowly transform the company and burned too much cash and alienated existing customers to fast to complete. Does anybody know if the interim CEO has mentioned anything about completing the transformation or is he going to continue half-in/half-out with some frankenstein creation: half alive and half dead?

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Perry bought an additional 3M shares...

 

From Filing:

"On August 30, 2013, one of the Perry Funds acquired 3,000,000 Shares from a shareholder of the Issuer as part of a registered, underwritten secondary offering at $12.90 per Share. The Reporting Persons acquired all the Shares reported in the Schedule 13D for investment purposes."

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Hedge-fund manager Kyle Bass, of Hayman Capital Management LP, disclosed a 5.2% stake in J.C. Penney Co., JCP +1.84%placing Mr. Bass among the struggling department-store chain's largest stockholders.

 

...

 

Mr. Bass holds 11.4 million of the department store retailer's shares, according to a filing with the Securities and Exchange Commission.

 

 

 

http://online.wsj.com/article/SB10001424127887324886704579052703653813312.html?mod=WSJ_business_whatsNews

 

Kyle Bass Discloses 5.2% Stake in J.C. Penney

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Anybody think it's ironic that the strategy of stores-within-stores that JCP was trying to pull off with RJ's vision worked for Best Buy, whose stock has tripled from its lows, while JCP remains depressed.

 

Seems like he was in fact the retail genius that many of us gave him credit for - just didn't have the discipline to slowly transform the company and burned too much cash and alienated existing customers to fast to complete. Does anybody know if the interim CEO has mentioned anything about completing the transformation or is he going to continue half-in/half-out with some frankenstein creation: half alive and half dead?

 

Honestly, I think selling clothes vs. selling electronics are marketing to two totally different customer bases. Although I wish JCP gave him more time to see how it would play out. I don't buy the cash burn argument. Radically changing strategy requires a large up front investment. Retail investment isn't like infrastructure...you don't invest over time. It's almost all up front, and the payoff takes time.

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Ackman is out.  Now Robbins at Glenview, Perry Capital, Soros, and Kyle Bass at Hayman are in.  All of which most likely participated in the tender from Ackman.  The BOD issued the poison pill last month that runs till August 2014.  Possible scenarios:

 

1) Ullman goes back to previous strategy and gets JCP back to the average, heavy promotion department store?

2) PE firm, several flush with cash and access cheap money, makes a play?

3) Perry Capital is successful in bringing on Ken Hicks, the CEO of Foot Locker

 

JCP already carries $3.3B in net debt with an EV of around $6.5B.  Assume PE firm puts up 20% equity you would need to lever the firm up another +$5B.

 

The cash burn is a concern with $1.5B in current liquidity and $300M left on the credit facility. 

 

Any thoughts on how this plays out?

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http://www.bloomberg.com/news/2013-09-13/roth-quits-j-c-penney-board-as-vornado-exits-stake.html

 

Roth Quits J.C. Penney Board as Vornado Exits Stake

 

 

Vornado Realty Trust (VNO) Chairman and Chief Executive Officer Steven Roth resigned from J.C. Penney Co.’s (JCP) board as his firm plans to sell its stake in the department-store chain.

 

The J.C. Penney stake will be exited in the “not-too-distant future,” Vornado said today in a filing with the U.S. Securities and Exchange Commission. The company owns about 6.1 percent of J.C. Penney’s shares, according to the filing. That makes it the department-store chain’s sixth-largest shareholder, according to data compiled by Bloomberg.

 

 

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