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J.C. Penney amends poison pill

  • J.C. Penney (JCP +0.5%) extends the expiration date of a poison pill to January 26, 2017 from August of this year.
  • The retailer also lowered the level at which the provision activates to 4.9% from 10%.
  • The move will help JCP to protect some tax benefits in addition to making a hostile takeover trickier.
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Comments (7)
  • Qniform
    , contributor
    Comments (3207) | Send Message
     
    How nice. A decision driven by a concern for management tenure - not shareholders wallets. This just eliminated another chance (however unlikely) for a rise in the equity price and/or regime change.
    28 Jan 2014, 11:01 AM Reply Like
  • Adel Antado
    , contributor
    Comments (26) | Send Message
     
    I agree. Management is looking for ways to protect their own pocketbooks by throwing the share-holders off the cliff. This is the classic sign of a salary factory, that is a company run for the management and it's executives, their pay-checks, compensation and retirement including "golden parachutes", not the folks who put their savings into the company with hope that the company would be professionally managed. No wonder JCP is no longer the economic prize of the past.
    30 Jan 2014, 09:19 PM Reply Like
  • Hector V
    , contributor
    Comments (422) | Send Message
     
    My initial thought when this story broke was that management was trying to convince the investing public that things aren't so bad. After all, why would they need to strengthen the poison pill unless there was some interested suitor? It's a bit like a boy/girl trying to convince the object of their affection that some other boy/girl is interested in them. I'd think Lampert's Sears fiasco would be a sufficient cautionary tale to fend off any would-be retail mavens with deep pockets. In other words, I'm not buying it. But hey, I'm just a hater/basher.
    28 Jan 2014, 11:53 AM Reply Like
  • sakilli
    , contributor
    Comment (1) | Send Message
     
    The company was doing well when Ron Johnson took over at the end of 2004 and the method of opperation he instituted crippled the company. Mike Ullman is trying to bring the company back to profitability. It is a huge company, you can't stop a train in 10 feet, it will take time to reverse the damage that was done over years. In the case the company makes money in the future this step allows the company to write off 2 billion in profits. This is good news, but not for the holders of +30% short the stock that obviously are manipulating the stock price. This stock will be volitle for sure in the immediate future, because of the amount of skin the shorts have in the game. If two things happen I feel comfortable weathering the storm. Quarter after quarter improvement, and assurance they have enough capital to keep the company afloat untill the turnaround can get up some steam. What I have read is that Mike has experience and a proven track record. Even though he obviously can turn this company around, outside factors can break you. If the stock does start going up shorts will have to cover there positions by purchasing stock. Time will tell...... Don
    28 Jan 2014, 11:53 AM Reply Like
  • Qniform
    , contributor
    Comments (3207) | Send Message
     
    Everyone looks at the Macy's "turnaround," but remember they shed liabilities in bankruptcy - so turnaround might not be the best word. More recent credit goes to Ullman as CEO at JCP from 2006 through 2012 when their net went from about $1 billion to $500 million. That's why they brought in Ron Johnson to begin with.

     

    But hey - if you like it, have at it.
    28 Jan 2014, 12:11 PM Reply Like
  • Hector V
    , contributor
    Comments (422) | Send Message
     
    >> It is a huge company, you can't stop a train in 10 feet, it will take time to reverse the damage that was done over years.

     

    But time is exactly what they don't have. A better analogy is that Ullman is trying to get a plane off the ground and is quickly running out of runway.
    28 Jan 2014, 12:42 PM Reply Like
  • cool1953
    , contributor
    Comment (1) | Send Message
     
    why the jcpenny can not change the whole managment team.they need right ceo to run the compnay and turn around the company.wrong decesion can put compnany in trouble and share holders loose lots of money
    28 Jan 2014, 10:27 PM Reply Like
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