Originally posted by Universal Exports
Clearly some people think this thing is worth a punt at current levels, put I am skeptical for the reason
@pikel1980has given but also the Oaktree involvement generally:
- They are known as a distressed debt investing specialist, not an equity investor
- Only about 5% of their holdings are in equity investments and they tend to exit these as quick as possible when they get them
- Oaktree's 2018 adjusted earnings were about 10x BLA's market cap - their exposure to BLA is a rounding error in their total AUM of over US$100 billion
- this probably sits in one of their distressed debt funds, with one or two 20-something MBA's monitoring the investment to make sure management doesn't stuff things up and Oaktree get their required return and then get the hell out.
I'd buy shares in NYSE:OAK over BLA any day.
Actually, I was thinking about Blue Sky again last night, how about this as the bigger concern. I was struggling to reconcile whats happening with the cash, given they have sold and closed a number of funds, so even if they didn't make much profit on them, they should have realized a raft of cash and performance fees that were in arrears (earnt and declared towards profits in historical years).
So as we get closer to the half year report, I'm actually concerned that the cash burn is much much closer to 50+ mil in the first 6 months.
But then reconcile that against the decrease in assets under management (AUM) and you get a much scarier picture - if you realised assets and have less cash than you started and decreased AUM, it means you are having some of the following issues:
1. Struggling to sell the investment products or;
2. the market is demanding you co-invest a greater % or;
3. the scariest one of all - there are serious issues in more funds that are not being disclosed and they are having to prop them up.
Something is going on here and the market update really doesn't do it justice
