Market Overview

JC Penney Files for Resale 39.08M Shares by Ackman's Pershing; Street Was Largely Ahead of This Move

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Shares of JC Penney (NYSE: JCP) have fallen about three percent in Monday's post-market session following a Reuters rumor and the following SEC filing which confirmed a company prospectus for 39.08 million shares for resale by Bill Ackman's Pershing Square.

The news should not be surprising to investors who have been watching the JC Penney/Ackman saga unfold over the last month. Following the removal of Bill Ackman from the JC Penney Board on August 13, an SEC filing from the company on the 16th disclosed a registration pact for Pershing to make up to four requests to authorize for sale JCP shares.

While the news should already be mostly digested by JC Penney holders as far as the Street is concerned, what's interesting here is the implications of the share sale on Ackman's other positions. As several traders have already pointed out to the Benzinga newsdesk, the registration means margin clerks will no longer be able to classify Ackman's JC Penney shares as collateral for his shorts... i.e. Herbalife (NYSE: HLF).

Since the initial SEC filing, Pershing Square has issued an official release confirming the registration. Click here to view the release.

Something to think about: responding to the news, retail guru Brian Sozzi recently tweeted an interesting tidbit: "#JCPenney does not need shareholder approval to issue more shares." Sozzi's thesis as of late has been JC Penney will soon need to raise capital.

Posted-In: Bill Ackman Brian Sozzi Pershing SquareNews Offerings

 

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