J.C. Penney (JCP) is having a really bad week. For the second straight session, the troubled department store stock fell sharply, dropping almost 9% today to $8.81on reports that another hedge fund manager has exited the stock.
Hayman Capital Management's Kyle Bass told Bloomberg Television today that his hedge fund has sold its stake in J.C. Penney's stock, but still holds the company's debt. Read here for the full report, or watch the interview here.
Hayman Capital disclosed in September holding 11.4 million shares, or a 5.2% stake and by the end of the month had cut that position in half following a dilutive share offering intended to help J.C. Penney raise cash for a turnaround.
Hedge fund manager Bill Ackman sold his J.C. Penney stock in August. And Perry Capital has reduced its stake by half.
Former CEO Ron Johnson has been blamed for alienating shoppers by changing prices and merchandise. The current CEO Mike Ullman is trying to reverse the retailer's fortunes by returning to old brands and strategies.
Wednesday, J.C. Penney's stock fell 10% after investors were disappointed by the company's report that same-store sales rose 10.1% in the November. Analysts argued that sales should have climbed higher given the company's terrible performance last year.
Maxim Group analyst Rick Snyder wrote:
While a 10.1% increase is impressive, it may not be enough. Should J. C. Penney report a 10.0% comp for the entire quarter sales would still be 24.3% below Q4 2011 sales. At this level, we estimate SG&A would delever by approximately 400 bp from Q4 of 2011. The deleverage is despite SG&A being an estimated $200 million below Q4 2011 levels. We would be more “excited” about traffic if the press release said it was up… We do not believe that any turnaround at J. C. Penney can be achieved without increased traffic….We will be watching sequential traffic with much interest in the future.
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