Let the Fortress Deal Serve as a Warning

This market doesn't give a FIG! I am speaking about the secondary of Fortress Investment Group (FIG - commentary - Trade Now), my nomination for the most hated deal, the one that I believe would never have gotten done if it weren't for the fact that FIG does so much trading.

This abomination of a secondary, which came at $5 and traded instantly down to $4.30, is a reminder that lots of companies that need capital aren't worth getting any. I've been negative about Fortress ever since it came public because I never liked to own shares in a hedge fund, which, by nature, must keep its strategies secret so you will never know what you are really buying.

I put Wes Edens, the CEO, on the Wall of Shame on "Mad Money" as the stock had its sickening slide and took it off at a buck, figuring enough downside already. Then the stock got short-squeezed up on the last quarter, which was crummy, but it allowed FIG to rally to the point where it could jam the Street with this deal.

So, think of it like this: Ford (F - commentary - Trade Now) prices 300 million shares at $4.75, and it goes to $5.40. Fortress prices 40 million shares at $5, and it gives up as much as Ford gained. Just shows you how hated this piece of business was.

FIG is a warning. Some deals shouldn't get done, but do.

This was one of them. Don't fall for the next one.

Know What You Own: Other asset-management stocks include Blackstone Group (BX - commentary - Trade Now), Franklin Resources (BEN - commentary - Trade Now), Brookfield Asset Management (BAM - commentary - Trade Now), T. Rowe Price Group (TROW - commentary - Trade Now) and Invesco (IVZ - commentary - Trade Now).

At the time of publication, Cramer had no positions in stocks mentioned.

ALL JIM CRAMER BLOG ENTRIES | POST A COMMENT | READ COMMENTS  

---

Jim Cramer is co-founder and chairman of TheStreet.com. He contributes daily market commentary for TheStreet.com's sites and serves as an adviser to the company's CEO. Outside contributing columnists for TheStreet.com and RealMoney.com, including Cramer, may, from time to time, write about stocks in which they have a position. In such cases, appropriate disclosure is made. To see his personal portfolio and find out what trades Cramer will make before he makes them, sign up for Action Alerts PLUS. Watch Cramer on "Mad Money" weeknights on CNBC. To order Cramer's newest book -- "Jim Cramer's Stay Mad for Life: Get Rich, Stay Rich (Make Your Kids Even Richer)," click here. Click here to order "Mad Money: Watch TV, Get Rich," click here to order "Real Money: Sane Investing in an Insane World," click here to get "You Got Screwed!" and click here for Cramer's autobiography, "Confessions of a Street Addict." While he cannot provide personalized investment advice or recommendations, he appreciates your feedback and invites you to send comments by clicking here.

TheStreet.com has a revenue-sharing relationship with Amazon.com under which it receives a portion of the revenue from Amazon.com purchases by customers directed there from TheStreet.com.