David Einhorn Has Closed His JCPenney Short Position And The Stock Is Spiking

David Einhorn, Greenlight Capital

Greenlight Capital’s David Einhorn closed out his JCPenney short position in the second quarter, according to a letter sent to investors, Reuters Katya Wachtel reports.

“J.C. Penney (short): This was our most profitable short of 2012. Though the retailer was poorly positioned, the shares rocketed in early 2012 based on overhyped promises put forth by a highly promotional CEO. Following the presentation of its strategy, the new CEO dumped a bunch of his personal stock on the market. We doubted the new strategy would  succeed. We covered when the Board fired the CEO before he could turn the company into a penney stock,” Einhorn wrote in the letter.

It’s trading higher in the wake of the news.

JCPenney’s stock was last trading up about 2% in today’s session.

The struggling retailer is the stock that activist investor Bill Ackman has been publicly cheerleading for over the past couple of years. 

So far, Ackman, who has has 17.74% stake in JCPenney, has taken a bath betting on the retailer.

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