Bill Ackman's Pershing Square has sold its entire stake in struggling department store retailer J.C. Penney, the company said in a statement and a filing.
The hedge fund had been the largest shareholder in the struggling retailer's stock, owning 39.1 million shares, or 18 percent of shares outstanding. Ackman's fund bought the shares at about $25, which means it stands to lose about $470 million, or about half of his initial investment.
Following the report, J.C. Penney shares dropped about 5 percent in after-hours trade before paring some losses. (Click here to track the company's stock.)
Pershing Square used Citigroup as the book runner for the deal. Citi will be offering shares at between $12.50 and $12.90, Dow Jones reported.
Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors, recalled that this isn't the first failed retail move for Ackman, whose investment in Target also soured.