Soros raises JC Penney stake but two big investors exit in second quarter

Wed Aug 14, 2013 7:33pm EDT
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By Svea Herbst-Bayliss

BOSTON (Reuters) - Billionaire investor and philanthropist George Soros likes ailing retailer JC Penney (JCP.N: Quote) so much that he added another 2 million shares to his already large investment, according to regulatory filings released on Wednesday.

Soros, who made news four months ago when he first announced a passive stake in company, reported owning 19.98 million shares at the end of the second quarter. The JC Penney holding is now the fourth largest in the portfolio.

The increase makes Soros Fund Management, which invests about $20 billion on his and his family's behalf, the retailer's second largest investor behind activist hedge fund manager William Ackman whose Pershing Square Capital Management owns 39 million shares.

Soros, whose investment decisions have been widely followed for decades, stepped into JC Penney shortly after CEO Ron Johnson was ousted after 17 months on the job with his plans to make over the store in tatters.

News of Soros' initial investment sent shares up 7 percent after they had closed at $15.24.

It also gave Ackman, a sometime tennis partner of Soros', a boost by suggesting that the two powerful men were now aligned. However, that may have changed, particularly as Soros Fund Management has also taken a new stake in Herbalife Ltd (HLF.N: Quote), the company Ackman is betting against, calling it a pyramid scheme.

On Wednesday, one day after a board room blowup prompted William Ackman to resign his directorship, JC Penny shares closed up at $13.11, and climbed 4 percent in after-hours trading.

Even as 83-year-old Soros is sticking with JC Penney, other prominent investors including hedge funds and big mutual funds, have trimmed or even completely exited their positions.   Continued...

Customers ride the escalator at a J.C. Penney store in New York August 14, 2013. REUTERS/Brendan McDermid