Peeee-ewwwww!: Given its horrendous performance over since its IPO three trading days ago, Och-Ziff (OZM) has managed to lose 12.5% from its $32 IPO price. Sure, Friday's loss was an itty bitty $0.05, but the new Barron's could help extend the slide with an unflattering piece on why at these levels it still overvalued and buyers are paying for mediocrity:
OCH-ZIFF CAPITAL MANAGEMENT group, the hedge-fund operator, had a rocky debut in the stock market last week. And the going could get rockier. Its shares may move even lower, because the company still commands a lofty valuation relative to Fortress Investment Group (ticker: FIG), another manager of so-called alternative investments, as well as to traditional asset managers like Legg Mason (LM) and newly public Pzena Investment Management (PZN)
THE DEAL'S AN EMBARRASSMENT for the underwriters, led by Goldman Sachs and Lehman Brothers, which priced the shares near the high end of a projected range of $30 to $33, despite the recent broad sell off in financial stocks. The talk on Wall Street is that Och-Ziff and the underwriters wanted to keep the stock out of the hands of hedge funds because of their reputation for quickly "flipping," or selling, their shares. Yet many of the supposedly buy-and-hold investors opted to quickly head for the exits....
AS FOR DANIEL OCH, FEW in the history of the asset-management industry have gotten so rich while generating such mediocre performance. Even after Och-Ziff's disappointing start in the stock market, the company's shares don't look like a bargain. And even if the shares drop another five to 10 dollars, they still might not be cheap.
Daniel Barry takes you through the math:
Mediocrity Rewarded and Rewarded and… - Barron's
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