Francis Hunt
Trading Education, Hunt Volatility Funnel & Capital Preservation
Blue Owl sits at the center of a private credit scandal that has yet to peak, and its stock has more downside after reaching a head-and-shoulders target. Per @junkbondinvest, Trump signed an order letting 401(k)s invest in private markets just as semi-liquid funds gate redemptions and BDCs cut dividends, making retail retirement money the exit liquidity. Ordinary savers risk becoming the bagholders. x.comÂ
Blue Owl's problem is its product, not its narrative: it sold retail investors illiquid private credit with no exit. Weeks after co-CEO Marc Lipschultz called its tech portfolio pristine with no red or yellow flags, investors sought to withdraw 41% of that fund and could get only 5%. His pay is tied to management fee revenue, not performance or credit losses, so executives profit from gathering capital even as loans sour or funds gate. Investors should run from anything associated with Blue Owl. … Show more
Blue Owl is past the point of being cooked as redemption requests at its private credit funds far exceed expectations. Per @negligible_cap, Blue Owl Technology Income Corp received 40.7% redemption requests and Blue Owl Credit Income Corp 21.9% in Q1, with redemptions kept to 5%. The stock fell 9.5%. x.comÂ
Blue Owl Capital's $330 billion in assets under management and Q3 earnings beat reinforce the bullish thesis behind a Strong Buy rating targeting 25%+ annualized returns. Distributable EPS beat estimates and the $0.23 quarterly dividend was maintained despite a 96% payout ratio. The risks have not disappeared; this is not a SWAN stock. x.comÂ
Blue Owl Capital's pristine financial model rests on assumptions that just broke. Its $2.92 billion revenue, 45% net margins and rising distributable earnings require every loan to keep performing. Yet Blue Owl suspended its Oracle data center project, gated investor redemptions because assets cannot be sold fast enough, and Jamie Dimon warned private credit players will blow up. With Brent at $119, no rate cuts through 2027 and memory shortages delaying builds, restructuring is the next crack. … Show more
Blue Owl is a falling knife because private credit is the new junk paper and the credit event has not even hit yet. Replying to @infraa_, who floated nibbling on private-credit longs like Blue Owl, buying here is catching a falling knife blindfolded. x.comÂ
Blue Owl's chart is a beauty: solid volume at support, a volume gap above, a tight consolidating wedge, and insiders buying at $15. Averaging in now is reasonable. x.comÂ
The highest-quality private equity and private credit managers, Apollo, Ares, Blackstone and KKR, are back on sale, mainly because of interest rates. They are not as cheap as during March's SaaS debt scare, and weaker names such as Blue Owl are still to be avoided. x.com x.comÂ
AI financing deals increase the market's perception that alternative asset managers are financing the AI capex buildout, putting their shares at risk in a bust or slowdown. Even if the deals make sense on paper, Blackstone, Apollo, Carlyle, KKR and Blue Owl shares look likely to be pain points in any AI capex bust or slowdown. x.comÂ
Private credit and major financials, including Ares, Carlyle, KKR, Blue Owl, Blackstone, JPMorgan and Goldman Sachs, are in the doghouse over a risk the market fears more than the Iran war. Anthropic's Dario Amodei has said something similar, and more and more companies are letting people go. x.comÂ
High-yield bonds will be among the first assets sold once private credit blowups force redemptions in mixed mandates, because liquid holdings are always the funding leg. Their resilience amid the private-credit carnage, noted by @yieldsearcher, holds only for now. x.comÂ
