Kyle Bass, the outspoken Texas hedge fund manager, has taken a bullish view on J.C. Penney, disclosing that his fund, Hayman Capital Management, has accumulated a 5.2 percent stake in the struggling retailer.
Mr. Bass, who made $500 million shorting the housing market during the financial crisis, has joined an investment fund founded by George Soros and Perry Corp in owning some of the biggest stakes in the retailer.
Hayman Capital’s stake was disclosed in a filing with the Securities and Exchange Commission on Tuesday morning. News of his position comes weeks after a rival hedge fund manager, William A. Ackman of Pershing Square Capital Management, resigned from J.C. Penney’s board and moved to sell his 18 percent stake in the company at a loss of nearly $500 million.
Mr. Ackman, who first emerged as a large investor in J.C. Penney three years ago, had been agitating for change at the top. In 2011, he moved to install Ron Johnson, the Apple executive credited with building its retail strategy, as chief executive. However, Mr. Johnson’s attempt to turn the company around by getting rid of its discount sales, among other things, failed and the board fired him. He was succeeded his predecessor, Myron E. Ullman III, on an interim basis.
During Mr. Johnson’s tenure, J.C. Penney’s shares declined by as much as 40 percent as the company continued to lose market share to its main competitors, Macy’s and Kohl’s, and the business became unprofitable.
This summer, Mr. Ackman engaged in a public and bitter battle with the board, calling for J.C. Penney’s chairman, Thomas J. Engibous, to be replaced. The standoff culminated with Mr. Ackman’s resignation on Aug. 13. A week later, he sold his shares for $12.90 each, representing a 3.4 percent discount to their closing price the day before. He lost about $473 million.
Soros Fund Management holds a 9.1 percent stake, while Perry Corp recently increased its stake to 8.6 percent from 7.3 percent earlier this summer, according to Bloomberg data.
J.C. Penney’s shares, which have fallen more than 50 percent this year, rose 1.9 percent on Tuesday and were trading at $12.72 per share.
