In the current market landscape, it just seems like its either raining or draining CEO’s. The Groupon and Lefkofsky news fades in comparison to the JC Penney and Bill Ackman news. For those who tuned-in late, J.C. Penney Company, Inc (NYSE:JCP) has been the backdrop for some high drama with a bit of near-violence thrown in for good measure.

Some media help

Barely four months after Ron Johnson, the Chief Executive Officer was ousted, JCP’s largest stakeholder, Bill Ackman, the billionaire is threatening the company board that he will sell his 18% stake if they do not hit the accelerator pedal on showing CEO Myron “Mike” Ullman the door. And subtlety not being an attribute of the aggressive Pershing Square hedge fund manager, he trained the CNBC spotlight on his campaign.

From spring to summer

He went public with the anti-Ullman letter that he had sent to the JCP board. In the letter Ackman had demanded that the CEO be replaced as soon as possible. Ullman had been “red-carpeted” back to the JCP entrance doors in the spring to free the company from the web of mismanagement and ill-planning that had been woven by Ron Johnson.

CNBC reported that JCP is considering bringing Allen Questrom, former CEO, back on board, this time in the Chairman role. What’s interesting is that the chessboard was set by Ackman and by the looks of it; he has been playing with Johnson, Ullman and now Questrom, like pawns. And while he does all of this, he wants to checkmate the company. So, is Ackman the black knight or the white one?

A rough road ahead

As far as J.C. Penney Company, Inc (NYSE:JCP) is concerned, the board is euphemistically “disappointed” but in truth “furious” that Ackman released his letter to CNBC at the very same time that he sent it to the board. The JCP board has tagged Ackman’s actions as counterproductive and disruptive. This is especially true as the company is at a crossroads and struggling to recover.

Not to take things lying down, the company’s board also ushered in some reinforcement in the form of the Starbucks’ Chief Executive Officer, Howard Schultz to strike-back at Ackman on Ullman’s behalf. Schultz also went the media-route and told The Wall Street Journal that Mike has left no stone unturned to save the company and that it is reprehensible of Ackman to leak a letter that asks for his removal.

JCP fights back

He went on to suggest that it was Ackman who had been raining blow after blow on the company, every step of the way. Ullman is a Starbucks board member. In the meantime, Thomas Engibous, the JCP Chairman had “bazooka”ed his own letter in which he insisted that Ullman was perfect for spearheading the trouble-ridden company’s turnaround. He also did not shy away from pointing out that Ackman had backed Johnson at that point of time.

That bazooka-shot boomeranged on him badly when Ackman raged ahead and said that Engibous should be guillotined as well. He asked for a board meeting as soon as possible, to vote on a new Chairman.  And so, while the boardroom mayhem continues, all I want to know is what effect all this sturm und drang will have on the J.C. Penney Company, Inc (NYSE:JCP) share price even as it dipped 5.78% at Friday’s close.

When speed kills

Are the board members even sparing a thought about how the average shareholder, the penny stock holder or the long-term investors in the company are going to get affected? Ackman did some back-seat driving when Johnson was at the JCP wheel, made him speed-up and that’s exactly what led him to a head-on collision. Activist investors and their workings have always intrigued me but when they go on a rampage, everyone just wishes they had stayed indoors.

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