Though J.C. Penney hasn't yet recovered from its roller coaster year (CEO Ron Johnson was outed earlier this month after his ambitious restructuring plans failed to see immediate results), the retailer has found an important cheerleader (a lifeline even?) in investor and philanthropist George Soros. Soros's hedge fund Soros Fund Management just bought 17.4 million shares of the company, giving him a 7.9 percent stake, WWD is reporting.
Soros' vote of confidence went a long way with other investors--the stock price jumped 7.2 percent to $16.33 in after-hours trading yesterday. At that price, Soros's stake in the company is $283.9 million. He is now the fifth-largest institutional investor in the company.
Under Ron Johnson, J.C. Penney's stock fell 50 percent--but with news of the CEO's departure earlier this month, and the return of former CEO Myron “Mike” Ullman, things have been looking slightly more optimistic for the retailer. While reactions to Ullman's return were mixed on the market (the stock rose 9% in after hours trading when Johnson's departure was announced, but sank 6% at the news of Ullman's appointment), Soros' belief in the company is a sign the ailing retailer could finally be on the road to recovery.
“[The investment] shows his confidence in the company,” said Walter Loeb, retail consultant. “It also shows that he thinks the return to a more promotional attitude will generate enough sales to return the company to profitability.”
J.C. Penney may just have more life in it yet.