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TheStreet Open House

Bill Ackman Opposes Himself and J.C. Penney

Stocks in this article: JCPSBUXCITHLF

NEW YORK ( TheStreet) -- So far the same activist investor who told the world he might sell or short shares of Herbalife (HLF) is now trying to save his nearly 20% stake in an old-time retailer.

Even a small investor can short the wrong stock and go long an equally erroneous one. But when the person responsible for Pershing Square Capital Management LP has accomplished this it's puzzling.

Bill Ackman's investment in one of the oldest retailers in the U.S. J.C. Penney (JCP) is down nearly 50% from the $600 million he invested in JCP.

This on top of his $1 billion bet against the renowned multi-level marketing distributor of nutritional supplements, which reportedly has racked up losses of nearly $350 million and the smell of old fish wafts higher in the air.

Lots of news has surfaced that although Ackman's fund is up 4% by the end of July 2013, other equity hedge funds have averaged nearly an 8% gain during the same time period. It looks even worse when compared to how the S&P 500 performed during the first 7 months of 2013, up almost 20%.

Perhaps the disparity in Ackman's investment style can best be illustrated by this 1-year price chart of both HLF and JCP. He and Pershing Square seemed to have helped HLF while harpooning JCP.

Perhaps the disparity in Ackman's investment style can best be illustrated by this one-year price chart of both HLF and JCP. He and Pershing Square seemed to have helped HLF while harpooning JCP.

HLF Chart HLF data by YCharts

This chart speaks louder than the Thursday letter Ackman wrote to the board of JCP and made public by CNBC on Friday. He demands that a new CEO be located and installed "within 30 to 45 days."

As the largest shareholder of JCP, Ackman has stated publicly that he has just one overriding goal in his demands: is to help save one of the great American companies.

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