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Ackman's Pershing Square sells entire JCP stake

Scott Eelis | Bloomberg | Getty Images

Bill Ackman's Pershing Square has sold its entire stake in J.C. Penney (JCP), 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 the 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 in after-hours trade. (Click here to track the company's stock.) (JCP)

The move comes two weeks after the 47-year-old billionaire left the retailer's board after a fight over top management's direction. Ackman built his stake in J.C. Penney three years ago before handpicking former Apple executive Ron Johnson to lead the company.

Johnson's tenure at the company lasted merely a year though before he was ousted and the company brought in former CEO Mike Ullman.

In recent weeks, though, Ackman's relationship with the company's board has grown increasingly tense.

The board of J.C. Penney erupted into a fight over the retailer's future, as Ackman demanded a faster search for a new CEO to replace Ullman and the board countered that he was being "disruptive and counterproductive."

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