In-Depth Obviousness Analysis at Fortress

| About: Fortress Investment (FIG)

NakedShorts’ Obviousness Rule rule states that, even if things are obvious, they are not officially true until some official writes for, or talks to, an official news organization to tell everybody something that everybody already knows, but doesn’t dare say.

Shares of Fortress Investment Group (NYSE:FIG) are getting tattooed in morning trading after Citigroup analyst Prashant Bhatia downgraded shares to “sell,” based on his estimates that private equity internal rates of return declined, reducing the company’s earnings power as credit conditions deteriorated.

“The reality is that the firm does not have a track record spanning multiple cycles,” writes Mr. Bhatia. “This raises the question of whether this firm prospered as a result of the credit bubble and now may not be able to repeat its past success.” [Emphasis added]

Did the music just stop (© Charles Prince, CEO, Retd.)? On a rampart (not a typo) tape, Fortress closed at $10.24, down a cool 13.3 percent. Still well above the 52-week (and all-time) low of $8.38 recorded Jul. 15.

Storming the Fortress
by David Gaffen
MarketBeat (WSJ) Aug. 5 2008

The Cracks in Fortress’s Defenses

DealBook (NYSE:NYT) Aug 5. 2008

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Tagged: , Asset Management
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