Wednesday, June 20, 2007

Blackstone IPO

The much anticipated Blackstone IPO will hit the market later this week. This will finally allow the "main street" investor to get his hands on one of the biggest and best private equity firms out there. Sounds great, right? I can't help but be skeptical here. Blackstone has been one of the major players of the M&A boom that has driven this bull market. If the upcoming outlook were so great, then why would ownership want to give up a stake? It seems like a case of ownership being very happy with what has transpired in the past few years, and they're going to use that great reputation to pull off another deal, the IPO.

price the same, and move the Blackstone and other private equity partnerships have come under fire because of legislation that has been introduced to curb their favorable tax treatment. This has caused Wall Street to wonder if the valuation will be lower than anticipated. So what do they do? They keep the IPO price the same, and move the IPO date up. I have no problem with not moving the price. The taxation legislation may not even occur, and their valuation shouldn't necessarily be changed on something that isn't for sure. However, I am a little leery about moving the date up. Its as if they are trying to "get their money and run" before things get any worse. They also could be anticipating a rate hike which could scare off future M&A activity and lessen the potential value of their company.

Overall, I think the IPO will be well received, as there isn't much for publicly traded companies like theirs. Everyone has wanted to get their hands on this type of investment over the past few years, and will probably buy this stock up out of the gate.

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