Hedge fund manager Bill Ackman's expensive experiment at J.C. Penney is over.
Ackman's Pershing Square disclosed Wednesday it sold its 39.1 million shares to Citigroup for $12.60 a share, locking in a roughly 50% loss for the investor.
The price Ackman got for the shares is even lower than J.C. Penney's Wednesday closing price of $12.76. Shares of J.C. Penney closed down 41 cents, or 3.1%, on Wednesday.
The sale locks in a significant loss for Ackman, estimated at nearly $490 million, after his failed attempted to breathe new life into the struggling retailer.
Ackman's fund, which owned 18% of J.C. Penney and was the largest owner, paid an average of $25 a share for the J.C. Penney shares.
Ackman pushed for changes at J.C. Penney that ended up turning off and confusing consumers. Ackman brought in former Apple retail chief Ron Johnson to wean consumers away from sales and to tempt them with branded apparel. But the strategy failed as consumers fled and revenue and cash flow fell.
The company ultimately apologized to consumers with some high-profile advertising and the new management team is attempting to undo the damage.
The sale of Ackman's shares comes just weeks after he resigned from the retailer's board of directors.
0 comments:
Post a Comment