J.C. Penney shares soar on Soros buy

The billionaire hedge fund manager has taken a 7.9% stake in the beleaguered retailer, but investors may be reading too deeply into the news.

By Jonathan Berr Apr 26, 2013 4:01PM

Shoppers at a J.C. Penney store in New York (copyright Mark Lennihan/AP)Shares of J.C. Penney (JCP) surged more than 11% Friday on news that billionaire George Soros had taken a 7.9% stake in the beleaguered retailer.

 

Investors, though, need to keep this development in perspective. The 17.4 million shares were acquired by Soros Fund Management LLC, a hedge fund that reportedly controls about $25 billion in assets. 

 

So the investment in J.C. Penney, worth about $281 million at current prices, is relatively small potatoes for the Hungarian-born financier. In fact, Soros, the company's chairman, wasn't personally involved in the decision to make this investment, according to CNBC's David Faber. 

 

Whether Soros actually has faith that new CEO Myron (Mike) Ullman will be able to rescue the retailer from the damage left by predecessor Ron Johnson remains to be seen. Faber pointed out that Soros may be hoping to benefit from a short squeeze, which would hurt investors who are betting that the stock will fall. He also may view the investment as a short-term trade.

 

Soros isn't the only -- or the biggest -- stakeholder in J.C. Penney among well-known hedge fund managers. Activist investor Bill Ackman's Pershing Square Capital LLC reportedly owns a 17.8% stake in the in the Plano, Texas-based retailer.

J.C. Penney is reportedly strapped for cash, and is trying to raise $1 billion, according to Bloomberg News. Earlier this month, The Associated Press reported that the company borrowed $850 million to replenish store inventory. Soros, with a fortune estimated at $19.2 billion, has plenty to lend.

There may be even more urgency to the company's quest for cash: The retailer is facing a slew of lawsuits, Bloomberg says, from contractors who say they weren't paid for store upgrades ordered by Johnson -- who was ousted earlier this month.

--Jonathan Berr does not own shares of the listed stocks. Follow him on Twitter at @jdberr.

 

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21Comments
Apr 26, 2013 5:10PM
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Every American should sell all their shares in J.C. Penney Because this guy is the worst excuse of a human their is
Apr 26, 2013 5:24PM
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Obviously this is just another thinly veiled attempt by Soros to make Obama king of the world and to take guns from all the white non-muslims. /endsarcasm font
Apr 26, 2013 6:28PM
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Obama's puppeteer now owns stock in JCP. Wow, that's just great. I thought they were in trouble before, but they are screwed now. I might have gone back to shopping at JCP if they had of dropped all the gay crap and brought back a lot of the old brands they used to have before this last idiot (CEO) ruined them. But I'll never have anything to do with JCP as long as Soros the communist POS has anything to do with it.
Apr 26, 2013 6:35PM
Apr 26, 2013 7:18PM
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Cater to gays, now this, no more jc for me
Apr 26, 2013 7:31PM
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Who loves ya baby? Why Soros and Obami El Salami!

Har har har!
Apr 26, 2013 6:01PM
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What's going on?? Not long ago this site was predicting JC Penney's was going under 
Apr 26, 2013 11:41PM
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Conservatives don't want anything to do with JCP now that Soros bought some stocks.
...Soros cooties? *L* okay, whatever.

I'll go back to JCP when I hear that they've hired back at least 2000 US workers, and I hope they'll bring in some Made in USA goods.

Apr 26, 2013 5:22PM
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Soros, the Jew who turned his own people into the NAZI's. What a Marxist winner. He and his crusty, Marxist Socialist a*s is still making the world miserable. J.C. Penny needs to go to hell in a handbasket for it's support of the immoral homosexual and pedophile agenda of the Marxist and particularly of the President, Vice President caught up in it's immoral frenzy of sodomy. The Obama years will go down in history as the main reason that millions of children are abused and sodoized by the liberal Marxist. Do whatever for a vote. They support and condone trafficing of human beings, or they would not be so in your face with this sick homosexual thing, coupled with pedophilia like the Vatican embraces. I wish, I pray that the American people wake up and see what is on their government bought dinner plate.
Apr 26, 2013 9:37PM
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One more "Great Reason" not to shop at JCP. JCP just seems to have a lot of such great ideas. 
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