A New Contestent Emerges!

A new front on the war to “Kill Bill” has opened up.

Dinan, who heads York Capital Management which manages $15.1 billion, this week told an audience at a Morgan Stanley investing conference in New York that the firm is shorting JC Penney’s debt, effectively taking a dim view of its future.

That puts Dinan at odds with Ackman and his $12 billion Pershing Square Capital Management hedge fund. Ackman has become a big JC Penney cheerleader since his firm started buying the stock in 2010.

Ackman is now under pressure from big-name investors taking the opposite side on two of his positions – the other being nutritional supplements company Herbalife Ltd in which he has a $1 billion short position and has been battling hedge fund manager Daniel Loeb and legendary investor Carl Icahn, who have both taken long positions.

A spokeswoman for York declined to comment on whether the hedge fund is betting against the retailer’s debt.

Morgan Stanley’s high yield bond desk is also betting against JC Penney bonds, said a person familiar with the firm. The firm is betting on a decline in the value of the retailer’s bonds using credit default swaps.

A Morgan Stanley spokesman declined to comment.

 Source

York Capital join the cabal of like minded gentlemen who are opposed to the success of both Ron “Business Man” Johnson and “Montauk Bill” Ackman.

Before JC Penney dies, it will respond violently, volatile, whip-sawing both longs and shorts alike. Nonetheless, the trend is firmly to the downside, in both equity and bond prices–let alone the underlying business. For now, it is a 3% short position of mine.