Four hours after the opening bell yesterday, Pershing Square’s stake in JC Penney had jumped by about $200 million on the back of news that the company had tapped Apple’s SVP of Retail, Ron Johnson, as CEO.
That contributed to what is now a $476 million profit on Pershing Square’s investment in the retailer.
Ackman paid $903.1 million for about 39 million JC Penney shares. “As of Tuesday afternoon, that stake was worth almost $1.3 billion,” Dealbook reported.
JC Penney closed at $35.29, which means Ackman made has made a “$475.9 million profit — on paper at least,” on his investment in the retailer.
Ackman’s hedge fund, Pershing Square, is JC Penney’s largest shareholder.
After news of Johnson’s hiring as CEO, the stock surged. Apple’s retail empire generates $3.19 billion in sales for Apple (13% of the company’s total revenue), and Johnson — now JC Penney’s CEO — headed up that division.
Ackman helped recruit Johnson. He and another investor “initially reached out to him to join the retailer’s board,” Dealbook reported.
Ackman said “Ron Johnson is the Steve Jobs of the retail industry.”
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