Why Och-Ziff Capital Management Group LLC Shares Sank

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Och-Ziff Capital Management Group  (NYSE: OZM  ) plunged 11% today after a report said the hedge fund helped finance controversial oil and mining deals in Africa.

So what: According to The Wall Street Journal, Och-Ziff made two loans of $234 million to companies controlled by Israeli billionaire Dan Gertler -- whose deals have been criticized for lacking transparency -- putting the hedge fund under serious scrutiny from U.S. authorities. While WSJ isn't exactly sure about the specific kind of information that U.S. investigators are seeking from Och-Ziff, the report alone raises plenty of uncertainty over the stock's appreciation prospects.

Now what: Gertler remains confident that the controversy surrounding his deals in Africa is completely overblown. "[Gertler] vigorously contests any and all accusations of wrongdoing in any of his Congo dealings," said a spokesman for the mining magnate. "Though we are a private business, we recognize we do have certain disclosure obligations and as our business develops, we are acting to improve our transparency efforts." So while the uncertainty surrounding Och-Ziff could be too much for average investors, less risk-averse contrarians might want to use today's plunge to bet on that confidence. 

Top dividend stocks for the next decade
The smartest investors know that dividend stocks simply crush their non-dividend paying counterparts over the long term. That’s beyond dispute. They also know that a well-constructed dividend portfolio creates wealth steadily, while still allowing you to sleep like a baby. Knowing how valuable such a portfolio might be, our top analysts put together a report on a group of high-yielding stocks that should be in any income investor’s portfolio. To see our free report on these stocks, just click here now.


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2933438, ~/Articles/ArticleHandler.aspx, 10/1/2014 5:09:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement