Reuters/ Lucas Jackson
Up to this point, Ackman's reliably supported him.
But at a Reuters conference today, he went off script and offered harsh criticism of the way things are going at the company.
He said there's been "too much change too quickly, without adequate testing," and that the company's execution "has been something very close to a disaster."
Johnson has been treated roughly by the press and Wall Street for the company's poor performance — the stock price has dropped 27.6 percent in the first quarter — and Ackman said the " criticism is deserved."
Ackman's support is absolutely critical for Johnson. Not only has he been his biggest cheerleader, the hedge fund's stake in the company is huge, nearly 18 percent of JC Penney's outstanding shares according to a recent filing. If this moves beyond criticism, and towards a reduction of the company's stake, it could be the end of the line for Johnson.
Up to the point, Ackman's company has lost as much as $500 million on paper on its investment in JC Penney.
Ackman's stalwart support has been one of the few consistent positives for Johnson, and these comments indicate that even he's fed up with the company's poor results.
That could shorten the timetable Johnson has to turn things around. He can't afford for Ackman to lose faith.
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