Ouch! Oaktree Capital IPO busted at the opening bell

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Oaktree Capital ManagementThe IPO of Oaktree Capital Group LLC priced at the low end of its projected range – and the news just got worse from there. Even at that price, buyers of the new issue lost money as soon as the stock started trading on the New York Stock Exchange.


Oaktree, which trades on the NYSE as “OAK,” sold 8,843,023 shares at $43 each. That was well below the planned sale of 11.25 million shares. And with the price at the low end of the projected $43-46 range, the IPO totaled only $380.2 million, rather than around a half billion bucks.

But it was downhill from there. The stock opened on the NYSE Thursday (4/12) morning at $41.00, a full two bucks below the IPO price. It traded as low as $40.63 before moving up above the opening price, but still well below the IPO price. The stock closed its first day on the NYSE at $42.39, down 1.4% from the IPO price.

The investment management company sold 7,888,864 new Class A units and certain early investors sold 954,159 units in the IPO.

RBR-TVBR observation: A busted IPO is always painful. But we would note again that this is not a media stock and the disappointing performance should not have any impact on broadcasting stocks. Oaktree just happens to manage funds with some radio investments (and a little bit of TV as well) which constitute only a tiny portion of its $75 billion of assets under management.


2 COMMENTS

  1. At $39 as of today, OAK is far from being a terrible IPO.
    If you compare it to Facebook, six months later, OAK seems to have been priced within 10% of its real value.

  2. @ 40.30 today this is far from a busted IPO, more like a short sighted individual trying to make a claim that he can later write a book about his guru status.

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