market folly

Richard Perry's hedge fund firm Perry Capital yesterday filed an amended 13D with the SEC regarding shares of J.C. Penney (JCP).  Per the filing, Perry has disclosed a 3.28% ownership stake with 10 million shares of JCP.

This means that Perry has dumped almost half of the JCP position they recently took.  Their latest filing shows they sold shares on September 27th at prices ranging from $9.02 to $9.5887.  This is around the time J.C. Penney announced that they would be issuing a ton of stock. 

When Perry initially took the stake, we pointed out that they were already down on the position as they started buying around $17.77 and added again around $14.86.  Then, a month later, they bought some of the shares that Bill Ackman was liquidating at around $12.90.  Then, as illustrated above, Perry capitulated and sold almost half of their stake in the $9's.

Things have only gotten worse as JCP now trades around $8.76.  While Perry has had a quick about-face on their JCP position size, it remains to be seen if they'll retain the rest of their shares. 

J.C. Penney has quickly become somewhat of a hedge fund graveyard.  Other hedge funds have been involved as well, such as Glenview Capital and Soros Fund.   And last month, we also highlighted that Kyle Bass' Hayman Capital had also started a J.C. Penney position.  We'll have to see if any of these other managers have a change of heart as well.