traders probably got smoked, but the top traders of the firm (top 4, ceo etc) all became multi-billionaires. intraday trading IPOs is always a tremendously risky thing. I didn't touch it, too much smoke and mirrors behind it, and all the believers LOVE to just jump in and while they do that all the guys behind closed doors are unleashing blocks. it traded nearly 75% of the total float outstanding. For those of you who did trade it, you got guts, just hope you made it out of the foxhole. On something like this, the big houses are just going to wait to see what kind of impact and profits can be made on taking these "private" equity funds public so they can do it as well. Definitely agree with the oxymoron statement.
You're very clueless. I think you need to go research private equity firms and how they work, or at least how ideally they should work. They do not care to disclose anything to people like you, who have no interest in long term gains, only short term, nor do you qualify to be one of the investors. You want the info, go find it, get involved in the industry, the deals, the clients. Call up Fortress and pretend to be something you are not, a worthy investor. They will disclose the minimum to the public arena, they always have and they are correct to do it. I used to be very familiar with their acquisitions and IPOs. These guys have one of the top track records on the Street. Try rereading what I said about how their IPOs perform (meaning the companies Fortress sponsored to take IPO). It is, or at least was, an almost fool proof strategy. You think it's a coincidence? Fortress rarely sells any of their assets and when they do, it is at a great gain. So your P/E theory has no base, their P/E can change with one deal, or even with their accounting. Their balance sheet is excellent, they have top fiscal condition and are rated as such in the industry. Yeah, noone is chasing it, cause it only opened up 89% over its pricing, that was all fake from specialist gapping daytrader orders, right? You really think there wasnt an accumulation program running today? I wish this thing would drop to the 20s, I wouldn't mind grabbing a piece of it. Not everyone thinks in the short term one day mindset, certain institutions do not care if they bought this at $35 and it dropped to $25. They would just buy more. You're jumping ahead and making assumptions about something you have little idea about. You probably never even heard of Fortress prior to the IPO announcement. I have and it is no surprise to me whatsoever about what happened today, nor is it a surprise that over 90% of Fortress is still basically private. Pull your head out of your a$$, the market is not crazy and most of the buyers of FIG are not suckers. Different mentalities, different backgrounds and different levels of knowledge.
So here's what you're saying: The only people who should buy FIG are those that are privy to their internal workings, and despite floating public shares today, they really have no obligation to be transparent in their financials as other publicly traded entities are. You are essentially saying that anyone other than those who are privy to the inner workings of FIG through personal exposure to the company is wise in relying upon blind faith in the core competence of their management, and their faith in a 70ish P/E ratio investment firm can't possibly be misguided. You are saying that their core holdings were purchased on a rational basis, they will continue to appreciate in value, they will continue to grow their EPS in a manner commensurate with their share price, and their proprietary methods for investing in assets is as sound as any publicly traded entity, even though they have no duty to disclose what those methods are, even though they are publicly traded now, relying on public investment to support their market cap. Correct me if I'm wrong in any manner. And since I haven't personally insulted you, I'd appreciate it if you return the favor in your response.
This opened way too high to scalp... I didnt touch it And I was hoping it would add a nice boost to my best PnL day ever (thank you OPBL)
http://financial.seekingalpha.com/article/26664 Fortress Goes Public: A Rational Look At Valuation Posted on Feb 11th, 2007 with stocks: FIG Roger Ehrenberg submits: So it finally happened: Fortress Investment Group is now a public company (FIG). Congrats, guys. I've met a few of the principals over the years and they are super-smart, very commercial, savvy guys. Obviously. They were the logical first U.S.-based hedge fund to go public, and I've written about them quite a bit during my tenure as a blogger. So Fortress going public was clearly going to happen, it was logical it should happen, and now it has happened. But the response to the Fortress offering was, well, demonstrably insane.The salient details of Friday's FIG offering are chronicled in Saturday's Wall Street Journal: Fortress Investment Group LLC, which manages $30 billion, became the first private-equity and hedge-fund manager to sell shares on U.S. markets and promptly emerged as one of the hottest initial public offerings in years. Its shares, issued at $18.50 apiece, opened for trading at $35 amid frenzied demand and closed at $31 -- 68% higher than its IPO price. ******************** Fortress estimates its private-equity funds have averaged 39.7% annual returns since 1999 and its hedge funds have averaged 14% annual returns since 2002. Fortress has been among the fastest growers in the business. In 2001, it managed $1.2 billion, and that rose to roughly $30 billion last year -- a 97% compound annual growth rate. ******************** After Friday's close, Fortress shares traded at roughly 40 times last year's earnings. Investment-banking giant Goldman Sachs Group Inc., by contrast, trades at 11 times earnings. Legg Mason Inc., a mutual-fund firm, trades at 24 times earnings. Friends, I am generally not one to talk about stock valuation in the absence of empirical data from the Internet, but I simply can't remain silent in the wake of investors' response to the Fortress offering. FIG's shares at 40x P/E? Are you stoned? It is a great firm run by top pros (as I've written many times), but the profit dynamics of the business simply don't support that kind of a multiple. I was interviewed a few months ago about how a firm like Fortress might be valued, and I responded in what I thought was a logical and fact-based manner. Basically, the firm has two components: Annuitized cash flows relating to management fees. This is a function of fee level, asset level, asset growth, tenor of lock-up and the probability of assets being redeemed. I would afford this type of stream a high multiple - say 20-25x earnings - due to its persistence, stability and growth potential. Variable cash flows relating to performance fees. This is a function of fee level, asset level and performance. FIG's performance variability is cushioned by the fact that it runs a highly diversified portfolio, likely offering benefits of non-correlated returns similar to a fund-of-funds. That said, correlations generally rise in market downdrafts and fees are driven by absolute - not relative - performance. Therefore I'd afford this stream a lower multiple of earnings - say 12-18x earnings - due to the risks involved but greater diversification than, say, Goldman Sachs. Is this a rational way to look at it? I think so. So how does one get to 40x earnings? Probably if you expect FIG's AUM to grow for a long time at its 5 year historic rate of 97%. Is this realistic? I mean, FIG isn't a business that scales like Google. At least I don't think so, but others clearly do. I think they are mistaken. First of all, investment management at FIG isn't just a model business (which is more like what Renaissance is like) - it's a people business. People require management. People have egos, tempers, dreams, and attitudes. These all need to be managed. It's hard and it poses a risk. Doubling in size every year will place such dramatic stress of the FIG management structure (not to mention infrastructure) that something will break. It has to. And it will tarnish returns. This is not a comment on the capabilities of the Big 5 at FIG - it is a comment on the Law of Large Numbers and the challenges of scale. I could rattle off another 10 reasons why this valuation is in cloud cuckoo land but I won't. You probably know them as well as I do. And I really wasn't planning on writing another post on Fortress given all that I've written in the past - but at a 40x P/E I felt compelled to say something. WAKE UP, PEOPLE.
I've got washed and rinsed. If you want to buy a hedge fund, its better off with the grand daddy of the them all...GS....trading at 11 P/E. FIG is a overhyped private equity firm. Yes, they managed a wholesome amount of dollar, but they only get 2 and 20 off it...if even that.
Price action is pretty bearish so far. With all this fundamental analysis does anyone want to put a price on this issue. Bid/Ask spread is about $.05, is this typical for an IPO or typical ass raping?:eek: