Was the Blackstone Public Debut A Letdown?

Posted by Bess Levin, Jun 25, 2007, 10:26am

crab-claws.JPGYes, the offering priced at $31 opened 18% higher at $36.55. Yes, Erin Burnett and Mark Haines could barely contain themselves all morning. Yes, DealBreaker wrote 131 articles about the whole thing on Friday alone.

But some people—cynical assholes—seem to think the BX offering was underwhelming. Andrew Ross Sorkin notes Paul Kedrosky, executive director of the William J. von Liebig Center for Entrepreneurism and Technology Advancement at the UCSD found the first day pop “scant,” that lead underwriter Morgan Stanley may have priced Blackstone’s units “low,” and that the offering paled in comparison to that of Fortress, Bukkake Party of IPOs, whose offer surged 68%.

ARS points out, however, that Tom Wolfe was on the scene, and that’s got to mean something. Indeed it does: an open bar (according to 24.3% of the DealBreaker audience). The $7.7 Billion Man and the $1.88 Billion Man (Schwarzman and Peterson, respectively) probably don’t much care either way whether or not you think Friday was a day that will live in infamy but, just for kicks, let’s hear it. The man who enabled “The Manny” deserves no free pass.

A Glamorous Public Debut for Blackstone [NYT]

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Posted in: Blackstone, IPO, Stephen Schwarzman

Comments

Posted by Zbignew, Jun 25, 2007 11:09AM

And the Award for "Best use of the word Bukkake in an article about business" goes to...

Posted by AJ, Jun 25, 2007 11:14AM

A huge price surge on the first day of trading means that the banks mispriced it and the Fortress guys left a ton of money on the table... I'd be sort of pissed if my shares skyrocketed the day they started trading... No one wants to sell something for $5 then the next day have that person sell it for $10

Posted by Anon, Jun 25, 2007 11:37AM

DB loves that pic

Posted by Sandy, Jun 25, 2007 12:13PM

Paul Kedrosky has it exactly backwards, for the reason AJ pithily points out. Had MS priced the units "low" it would have looked *more* like the Fortress IPO, not less. Rather, this IPO seems to have found the sweet spot.

Posted by , Jun 25, 2007 12:17PM

yes, blackstone priced its ipo better - ie, it got a good deal from the underwriters - but that doesn't mean that a lack of interest in bx post-ipo isn't a signal of market disinterest and a top.

besides, a big bounce post-ipo doesn't mean the issuer got robbed - look at google - it got a better deal from its dutch auction than it could from underwriters in a normal negotiation, but there was still a huge pop

Posted by inIT4the$, Jun 25, 2007 12:32PM

Where would Timmy Sykes value BX? That's what dealbreaker readers are dying to know!

Posted by Sandy, Jun 25, 2007 2:16PM

Anon: Perhaps we don't have the same definition of a "post-IPO pop". I believe GOOG priced around $85 per share and a quick search reveals that it began trading in August of 2004 at $100.01. As a proponent of Dutch auction IPO, I agree that Google did not get robbed (as there was no underwriter-negotiated price to do the robbing). But I disagree that there was much of a "pop" for GOOG (around 18%; about the same "pop" BX experienced). Sure it's appreciated >400% since the IPO, but a lot of things have happened since then and I'd hardly consider such long-after-the-fact changes part of any "IPO pop."

I'm fairly sure a "lack of interest" would necessarily signal "market disinterest," granted my understanding of those words; so I'm not sure anything meaningful can be gleaned from your first sentence other than that you believe that there's somehow evidence of a lack of interest.

Posted by , Jun 25, 2007 2:57PM

would that be a quick GOOGLE search by any chance?

Posted by AJ, Jun 25, 2007 4:09PM

I've always wanted one of my comments to be described as pithy. That made my day.

Posted by Fred, Jun 26, 2007 9:03AM

Cynical asshole problem? Try Sendahole.com.

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