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Boardroom brawl at J.C. Penney sends shares lower

  • Shares of J.C. Penney (JCP -3.7%) have given back around half of yesterday's gains as it looks like Bill Ackman's letter to the board may have created a situation that is more contentious than he bargained for.
  • "It's turned into a full-fledged boardroom brawl," CNBC's Scott Wapner says, referencing JCP's rather contemptuous response to the letter.
  • Yale's Jeff Sonnenfeld calls the Pershing Square chief "an angry guy going through his temper tantrums," before suggesting that it was indeed Ackman's actions (i.e. bringing in Ron Johnson) that tanked the stock in the first place.
  • The only thing to say here is that investors dislike uncertainty and the situation seems to have gotten a bit more uncertain for JCP after yesterday.
Comments (4)
  • jmj858
    , contributor
    Comments (95) | Send Message
     
    If I were long JCP and short HLF, I would be an angry guy too. But I still can't imagine sending a letter of this type to the media at the same time I send it to the board. Desperate times call for desperate measures, but it appears we are observing a major implosion here.
    9 Aug 2013, 10:46 AM Reply Like
  • Spacely's Sprockets
    , contributor
    Comments (155) | Send Message
     
    Ackman wants to bring in another pretty boy-genius like Ron Johnson and the board is basically telling Ackman to eff off. Mainly because the board made the gross error of letting Ackman bully them into hiring Johnson in the first place. Johnson the man who almost killed JCP. "Take your money and eff off Ackman;" said the board. That's basically the fiery situation in a nut shell as Cosmo sees it. Should be fun though to kick back and watch this play out!
    10 Aug 2013, 12:18 AM Reply Like
  • jmkearns
    , contributor
    Comments (9) | Send Message
     
    This board and their actions and choices continue to hamper any chances for a successful turn around. This has been confirmed by the financial community, Wall Street and more importantly past and future customers in their reactions to Board choices during the past two years.

     

    Just as in the current Washington political community the board is more interested in ego less in progress. Perhaps there is a light at the end of the tunnel with the most current suggestion of a Mr Questram as Chairman and Mr Hicks as CEO ticket. Now that is progress, allowing for a separation of responsibilities with candidates having the correct balance and experience in terms of finance,merchandising and marketing coupled with a track record of running successful retail organizations.

     

    I have worked under an organization where these men applied their skills and concern for both the organization and the associates within .

     

    My vote is for this ticket in 2013.
    9 Aug 2013, 11:48 PM Reply Like
  • User 14479592
    , contributor
    Comment (1) | Send Message
     
    It's clear that Ackman does not have the expertise to be involved in matters of corporate management beyond finance.
    His hiring of Johnson and support of the Walker hire based on a single facet of changing the marketing/merchandising strategy while not understanding that J & W were both void of enough of the skills necessary to build a team to execute the strategy is clearly evident.
    Even if you don't consider the results, the entire board should resign based on their lack of oversight and knowledge of the time table required for such a change.
    By the way Questrom is not the answer. Although he has many of the skills the recent "clowns" did not have he IS MISSING the one thing that Johnson DID HAVE. Questrom did not show the vision to redirect a failing retailer by changing direction as needed in his time at JCP, Federated, Barneys or NM.
    Perhaps as Macy's has proven, the scope of the retail business at this level has made the job at the top too complex for ANY retail CEO. If you look at the past several decades the success stories come from organic growth retailers like Wal-mart, & Target whose management talent grew to some degree with their growth of the business. Most stores that grow thru acquisition just can't grow their talent fast enough to accommodate the scope of their new bigger purchased business.
    Although JCP didn't grow thru acquisition the department store industry has evolved "leaderless" (last 2 talents were Finkelstein before he became a bean counter and Traub who finished out and executed his vision, but neither had to deal with the complexity of today's department store) in the last 2 decades so it's unlikely that this segment has grown a balanced talent that JCP would be willing to take a shot at.
    RIPJCP.
    11 Aug 2013, 01:53 PM Reply Like
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