There was a juxtaposition of events at two major retailers this past week.
Each involved a major shareholder sloughing off a chunk of stock after a takeover attempt. But while both moves were seen as decidedly positive events, they each seemed to leave a different taste in the market's mouth.
For one stock, it was the taste of bitter dregs at a bottom, with the hope of sweeter drafts ahead. The other left the flavor of a bubbly turnaround threatening to go flat.
If you pay attention to business news at all, you know it had an ongoing tussle going on with hedge funder Bill Ackman, who controlled about 18 percent of the company. Well, this past week Ackman apparently tired of the fights with the board about who should be CEO and what direction the company should go. He dumped his 39 million shares for about half the price at which he bought them, racking up a loss of roughly $470 million.
"Clearly people are relieved this block of stock is gone," said Jan Kniffen, head of his equity research firm J Rogers Kniffen. "They must be relieved Bill (Ackman) is gone, and people are clearly buying in. I think long term, it's got to be good for the stock. In the short term, I thought it would be bad, and it's OK. I'm pleasantly surprised at the way the market reacted."
But many traders had been shorting J.C. Penney stock. Some of the market's positive reaction could have simply been traders covering a bet that the stock would continue its months-long march downward. And while traders may not be outright negative anymore, that doesn't mean they are positive on the company's prospects.
"The way it's trading right now, in my opinion, is (it's) trading on the fact that within four to six quarters, the company could be out of business, burn through all its cash and be nothing," Rosecliff Capital's Mike Murphy said on CNBC's "Fast Money: Halftime Report." "I think there's opportunity here if they can reverse that."
Indeed, such trepidation prompted some traders to suggest options strategies rather than straight bets on the stock.
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"I really think J.C. Penney is finding a bottom, but for those prudent investors like us here in Chicago, we want to utilize the acronym JCP and just trade options; so 'Just Calls Please' is the way to call the upside," said Jeff Kilburg of KKM Financial, appearing on "Power Lunch." "It gives you an opportunity to hop on. J.C. Penney has to focus on their cash, having the liquidity and cash by the end of the year. They have to get back from injuries. They're still healing from a blown out ACL."
"I think what the market wants to see is ... that there's positive momentum going forward, that it's getting less worse. And that less-worse scenario happened in the second quarter," added Dana Telsey of the Telsey Advisory Group, in an appearance on "Squawk Box." "You need it to happen in the third and fourth quarter."
The big box electronics retailer said its chairman emeritus and founder, Richard Schulze, will be selling some shares as well.
Now Schulze, like Ackman, had also been in a fight with a board—Best Buy's. But that seemed to be settled last spring, when Schulze put aside his effort to take the company private and rejoined it as chairman emeritus.
But this was less of a "dump" and more of a "take advantage" sale. Schulze had been planning to sell shares to fund his family's charitable foundation. And Best Buy shares have tripled since December as the retailer has managed to get a turnaround going.
"The company in general is just starting to fire on all cylinders," said John Stephenson, portfolio manager at First Asset Investment Management, in a "Talking Numbers" interview. And developments outside the company, like an Internet sales tax, are also helping. "All of a sudden that price gap between Best Buy and Amazon shrinks to nothing," he said.
Of course, there's a Debbie Downer at any party. Some noted it may be more of a case of the stock finally getting back to levels near where it was four years ago.
"Prior investors like Mr. Schulze in fact are going to be happy to get out at close to flat because they've been on such a wild ride over the last few years," Enis Taner, global macro editor at RiskReversal.com, told "Talking Numbers."
And while Best Buy has executed well, analysts noted it still faces challenges.
"They paralleled the genius bar that Apple has. ... They've also done some nice shops and done good partnerships within the stores," Mary Epner, of Retail Analysis, said during an appearance on CNBC's "Power Lunch." "They actually look very good for back to school. The challenge is going to be doing more with these exclusive partnerships so they help launch with the respective brands and staying ahead of all the digital technology."
Indeed, some traders think the stock is just too expensive.
"It's gone too far, too fast," Kilburg said during his "Power Lunch" appearance. "It's a great company. They did what they said they were going to do, just like Facebook—they executed on their strategic plan. I want to buy it, but it's got to be in the mid-20s. This is too rich of a price in the mid-30s."
Two retailers, two turnaround efforts, two takeover attempts, two shareholder selloffs ... but perhaps at the end of the day both have the same dubious flavor?
—Allen Wastler is managing editor of CNBC.com. Follow him