Blue Owl Co-CEOs Remove Pledged Shares Amid Stock Rout, Reducing Margin Call Risk
OWL sits 24% above its 52-week low of $7.95.
Summary
Blue Owl Capital's co-CEOs, Doug Ostrover and Marc Lipschultz, have removed over 130 million shares each, representing roughly two-thirds of their stakes, as collateral for personal loans. This significant action, reported by the Wall Street Journal, comes amidst a severe stock rout for Blue Owl, with shares down 35% year-to-date, and increasing scrutiny of the private credit market. The move aims to reduce the risk of margin calls on these substantial holdings, which could have otherwise led to forced selling and exacerbated downward pressure on the stock. This follows recent negative developments, including a Moody's outlook cut on a major Blue Owl fund and the firm limiting withdrawals from two funds due to historic redemption requests. While the removal of pledged shares mitigates a potential selling overhang, it underscores the ongoing challenges and credit concerns facing the company and the private credit sector.
At the time of this announcement, OWL was trading at $9.86 on NYSE in the Finance sector, with a market capitalization of approximately $15.3B. The 52-week trading range was $7.95 to $21.08. This news item was assessed with negative market sentiment and an importance score of 8 out of 10. Source: Reuters.