Blue Owl Capital Faces Class Action Lawsuit
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jan 30 2026
0mins
Should l Buy OWL?
Source: Globenewswire
- Poor Financial Performance: Blue Owl Capital reported fee-related earnings of only $376.2 million for Q3 2025, missing market expectations, which led to a 4.23% drop in share price on October 30, 2025, indicating significant profitability pressures.
- Merger Agreement Impact: The announcement of a merger agreement with its subsidiaries was met with skepticism, resulting in a 4.72% decline in share price on November 6, 2025, reflecting investor concerns about the merger's prospects.
- Investor Confidence Eroded: An article in the Financial Times revealed that OBDC II investors could face a 20% loss due to the merger, exacerbating market fears regarding Blue Owl's liquidity issues, leading to a 5.8% drop in share price on November 17, 2025.
- Class Action Lawsuit Initiated: Investors have filed a class action lawsuit due to the company's failure to disclose liquidity pressures and asset base issues, with a deadline to file a lead plaintiff motion by February 2, 2026, highlighting significant dissatisfaction with corporate governance and transparency.
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Analyst Views on OWL
Wall Street analysts forecast OWL stock price to rise
15 Analyst Rating
12 Buy
3 Hold
0 Sell
Strong Buy
Current: 11.580
Low
18.00
Averages
21.13
High
28.00
Current: 11.580
Low
18.00
Averages
21.13
High
28.00
About OWL
Blue Owl Capital Inc. is an alternative asset management company. The Company deploys private capital across Credit, GP Strategic Capital and Real Estate platforms on behalf of institutional and private wealth clients. Its product platforms include Credit, GP Strategic Capital and Real Estate. Its credit products offer private financing solutions primarily to upper-middle-market companies. Its credit products are offered through a mix of business development companies, long-dated private funds, managed accounts and collateralized loan obligations. It is focused on acquiring equity stakes in or providing debt financing to private capital firms. Its Real Estate products are focused on acquiring triple net lease real estate occupied by investment-grade or creditworthy tenants. Its Real Estate products are offered through Permanent Capital vehicles, including its real estate investment trusts, and long-dated private funds. It offers asset management services to the insurance industry.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
Blue Owl's $1.4 Billion Loan Sale Triggers Market Concerns
- Loan Sale Scale: Blue Owl announced the sale of $1.4 billion in loans to institutional investors at 99.7% of par value, indicating market confidence in loan quality, yet it failed to calm fears, leading to a significant drop in its stock price.
- Redemption Policy Change: The company replaced voluntary quarterly redemptions with mandated 'capital distributions,' interpreted as a forced sale of high-quality assets under redemption pressure, exacerbating investor anxiety.
- Market Reaction: Although Blue Owl stated that investors would recover about 30% of their funds by March 31, concerns over liquidity issues persisted, resulting in a more than 50% decline in its stock price over the past year.
- Industry Impact: Amid a broader tech and software selloff, Blue Owl's situation is viewed as a potential harbinger of crisis in the private credit market, raising questions about whether the loans sold were representative of the overall funds, thus increasing market uncertainty.
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- Credit Rating Impact: CoreWeave's B+ 'junk' rating has caused some specialty lenders to pass on financing, reflecting institutional investors' cautious stance towards high-risk AI companies, which may hinder future funding opportunities.
- Bridge Financing Pressure: While Blue Owl claims the project is 'fully funded, on time, and on budget,' it faces a $500 million bridge financing obligation due in March 2026, and failure to secure long-term debt partners may force it to tap into its own balance sheet.
- Market Signals: The difficulties banks faced in financing Oracle's data center project further highlight the gap between AI 'hype' and the 'credit reality' of infrastructure, as institutional lenders grow increasingly wary of projects lacking investment-grade tenants.
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- Economic Data Impact: U.S. Q4 GDP grew by 1.4%, below the expected 2.8%, while the core PCE price index rose by 2.7%, exceeding expectations of 2.6%, suggesting inflation pressures may limit the Fed's ability to cut rates, affecting market sentiment.
- Manufacturing Activity Decline: The February S&P manufacturing PMI unexpectedly fell to 51.2, below the anticipated 52.4, indicating weakness in manufacturing that could challenge economic recovery and further exacerbate market uncertainty.
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- Redemption Halt: Blue Owl Capital announced it will permanently stop redemptions from Blue Owl Capital Corp. II, marking a shift from its earlier plan to reopen withdrawals this quarter, and instead will begin returning investor capital, indicating a strategic response to a surge in industry-wide redemption requests.
- Cash Tender Offer Proposal: Saba Capital and Cox Capital Partners notified Blue Owl Capital Corporation II on February 17, 2026, of their intention to initiate cash tender offers for a portion of its outstanding shares, with expected offer prices at a 20-35% discount to the most recent estimated net asset value, providing a liquidity solution for retail investors.
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- Investor Sentiment: On the social media platform Stocktwits, sentiment around OWL trended in 'extremely bullish' territory with extremely high message volume, indicating strong market interest in Blue Owl's future performance despite facing significant challenges.
See More
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- Loan Sale Overview: Blue Owl BDC announced the sale of $1.4 billion in loans to institutional investors at 99.7% of par value, indicating strong loan quality; however, the market reacted negatively with a stock price drop, reflecting investor concerns over future liquidity risks.
- Redemption Policy Change: The company replaced voluntary quarterly redemptions with mandated 'capital distributions', meaning future asset sales or earnings will fund redemption requests, which the market interpreted as a sign of redemption pressure, potentially leading to forced sales of higher-quality assets.
- Market Reaction and Confidence Crisis: Although Blue Owl executives stated that investors would receive about 30% of their funds back by March 31, market confidence in its liquidity management was shaken, with shares down over 50% in the past year, raising widespread concerns about the private credit market.
- Industry Outlook and Risks: With over 70% of loans concentrated in the software sector, Blue Owl BDC faces increasing tension between liquidity demands and asset illiquidity, leading to a more pessimistic market outlook, with some economists viewing it as a potential 'canary in the coal mine' for future financial crises.
See More
Blue Owl's $1.4 Billion Loan Sale Triggers Market Concerns
- Loan Sale Scale: Blue Owl announced the sale of $1.4 billion in loans to institutional investors at 99.7% of par value, indicating market confidence in loan quality, yet it failed to calm fears, leading to a significant drop in its stock price.
- Redemption Policy Change: The company replaced voluntary quarterly redemptions with mandated 'capital distributions,' interpreted as a forced sale of high-quality assets under redemption pressure, exacerbating investor anxiety.
- Market Reaction: Although Blue Owl stated that investors would recover about 30% of their funds by March 31, concerns over liquidity issues persisted, resulting in a more than 50% decline in its stock price over the past year.
- Industry Impact: Amid a broader tech and software selloff, Blue Owl's situation is viewed as a potential harbinger of crisis in the private credit market, raising questions about whether the loans sold were representative of the overall funds, thus increasing market uncertainty.
See More
CoreWeave's Debt Rating Impedes $4B Financing
- Failed Financing: Blue Owl Capital's inability to raise $4 billion for a Pennsylvania data center has led to an over 8% drop in CoreWeave's stock, indicating a lack of market confidence in AI infrastructure projects.
- Credit Rating Impact: CoreWeave's B+ 'junk' rating has caused some specialty lenders to pass on financing, reflecting institutional investors' cautious stance towards high-risk AI companies, which may hinder future funding opportunities.
- Bridge Financing Pressure: While Blue Owl claims the project is 'fully funded, on time, and on budget,' it faces a $500 million bridge financing obligation due in March 2026, and failure to secure long-term debt partners may force it to tap into its own balance sheet.
- Market Signals: The difficulties banks faced in financing Oracle's data center project further highlight the gap between AI 'hype' and the 'credit reality' of infrastructure, as institutional lenders grow increasingly wary of projects lacking investment-grade tenants.
See More
Humanoid Robots Are Approaching, but Cost Remains a Challenge.
Humanoid Robot Performance: NBC News reported on Unitree's Lunar New Year celebration, showcasing robots performing impressive feats like kung fu, back flips, and swordplay with remarkable speed and coordination.
Advancements in Robotics: The event highlights the rapid development of artificial-intelligence-trained robots capable of performing labor-saving tasks, aligning with recent discussions on the accelerating pace of the robot revolution.
See More
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- Market Recovery: The S&P 500 rose by 0.69% and the Nasdaq 100 by 0.87% after the Supreme Court overturned Trump's global tariffs, indicating a positive investor response to the policy shift that alleviates trade tensions.
- Economic Data Impact: U.S. Q4 GDP grew by 1.4%, below the expected 2.8%, while the core PCE price index rose by 2.7%, exceeding expectations of 2.6%, suggesting inflation pressures may limit the Fed's ability to cut rates, affecting market sentiment.
- Manufacturing Activity Decline: The February S&P manufacturing PMI unexpectedly fell to 51.2, below the anticipated 52.4, indicating weakness in manufacturing that could challenge economic recovery and further exacerbate market uncertainty.
- Earnings Optimism: Over 74% of S&P 500 companies reported earnings that beat expectations, with Q4 earnings growth projected at 8.4%, demonstrating strong corporate profitability that may support the stock market despite macroeconomic challenges.
See More
Blue Owl Capital Halts Redemptions and Initiates Cash Tender Offers
- Redemption Halt: Blue Owl Capital announced it will permanently stop redemptions from Blue Owl Capital Corp. II, marking a shift from its earlier plan to reopen withdrawals this quarter, and instead will begin returning investor capital, indicating a strategic response to a surge in industry-wide redemption requests.
- Cash Tender Offer Proposal: Saba Capital and Cox Capital Partners notified Blue Owl Capital Corporation II on February 17, 2026, of their intention to initiate cash tender offers for a portion of its outstanding shares, with expected offer prices at a 20-35% discount to the most recent estimated net asset value, providing a liquidity solution for retail investors.
- Market Reaction: While Blue Owl's stock rose 2.2% in extended trading hours, it has fallen 54.5% over the past year, reflecting market concerns about its financial health amid multiple quarters of net outflows and rising redemption gate provisions.
- Investor Sentiment: On the social media platform Stocktwits, sentiment around OWL trended in 'extremely bullish' territory with extremely high message volume, indicating strong market interest in Blue Owl's future performance despite facing significant challenges.
See More
Blue Owl BDC's $1.4 Billion Loan Sale Raises Market Concerns
- Loan Sale Overview: Blue Owl BDC announced the sale of $1.4 billion in loans to institutional investors at 99.7% of par value, indicating strong loan quality; however, the market reacted negatively with a stock price drop, reflecting investor concerns over future liquidity risks.
- Redemption Policy Change: The company replaced voluntary quarterly redemptions with mandated 'capital distributions', meaning future asset sales or earnings will fund redemption requests, which the market interpreted as a sign of redemption pressure, potentially leading to forced sales of higher-quality assets.
- Market Reaction and Confidence Crisis: Although Blue Owl executives stated that investors would receive about 30% of their funds back by March 31, market confidence in its liquidity management was shaken, with shares down over 50% in the past year, raising widespread concerns about the private credit market.
- Industry Outlook and Risks: With over 70% of loans concentrated in the software sector, Blue Owl BDC faces increasing tension between liquidity demands and asset illiquidity, leading to a more pessimistic market outlook, with some economists viewing it as a potential 'canary in the coal mine' for future financial crises.
See More
