Ackman Agrees to Leave J.C. Penney Board
Image via Flickr/ Larry Myhre
J.C. Penney (NYSE: JCP) announced today that activist investor Bill Ackman was resigning from its Board of Directors after a tumultuous time for the embattled retailer. The Company said that Ronald Tysoe, an experienced retail executive, was replacing Ackman on the Board. JC Penney was down around 2.5% in trading on the news.
Ackman is the head of Pershing Capital Square Management, an activist investor hedge fund. Pershing Capital owned around 39 million shares in J.C. Penney as of the end of March. The hedge fund began buying up shares around three years ago, when they were trading at approximately $20. Shares have since been beaten down by the continued woes of the Company. The retailer’s share price has fallen over 33% this year.
Last week, Ackman publicly called for J.C. Penney to replace its Chairman Thomas Engibous and CEO Myran Ullman. The public dispute comes at a critical time for the Company, with the back to school season in full swing and the holiday season on the horizon. Ackman was responsible for the installation of the prior CEO Ron Johnson. Johnson had previous success with the creation of the Apple retail stores. Johnson tried to remake the image of the discount retailer during his tenure, but ended up alienating the Company’s core customers. He was fired as CEO in April of this year.
Ackman has been in the news recently as well for his large short position in Herbalife, Inc. (NYSE: HLF), having called the company a ponzi scheme and stating that the value of the stock should be zero. Other prominent hedge fund managers and investors, including Carl Icahn and George Soros, have taken the other side of that bet while the stock price has soared.
