Why Shares of Fifth Street Finance Corp. Are Surging on Friday

Shares of Fifth Street Finance Corp. (NASDAQ: FSC) are up nearly 16% as of 10 a.m. EDT on news that Oaktree Capital Group (NYSE: OAK) is taking over the poorly performing business development company.

Fifth Street Finance Corp. has struggled under the direction of Fifth Street Asset Management (NASDAQ: FSAM).

When Fifth Street Finance filed its first quarterly report as a public company in 2008, it reported having a book value of $13.20 per share. But after a long list of bad investments, dilutive equity issuance, and run-ins with the SEC about its financial reporting, the BDC last reported book value of $7.23 per share, roughly 45% less than where it began. While other BDCs capitalized on a lender-friendly credit market in 2009-2011, Fifth Street Finance reported large losses.

Source: Fool.com