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Deconstructing Blackstone’s “Buy”

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Despite winning the distinction of Worst IPO in the History of IPOs (real title: Worst IPO of the Year), with the BX stock dropping 23% from its initial $31 offer, a cornucopia of Wall Street firms gave the P.E. goliath “buy,” “outperform” or “overweight” ratings today. Citigroup’s Prashant Bhatia wrote that “Blackstone is positioned to generate double-digit earnings growth driven by its superior over-the-cycle investment performance,” and analysts from Merrill Lynch, Lehman Brothers, Morgan Stanley, Deutsche Bank, Credit Suisse, and Bank of America all laid the toothy-smile emoticon on thick, with Lehman Brothers even going so far as to use the lips ‘n mole prostitute face. Some—Reuters’ Jonathan Keehner for one—would like to know how, in spite of the dwindling stock, some stuff going on with the credit markets and the 15 vs. 35 issue, no one thinks Stephen’s Crab Shack by the Sea is a “sell.”
If we were cynical, we’d say it had to do with every “sell” rater being an underwriter on the IPO, and that the “Chinese Wall” provides about as much protection as the rhythm method (more than the “But it’s my birthday” method, less than “If we do it like this, we don’t need condoms, and God will still love us” method). If we were really cynical we’d say: because Blackstone capitalized on the inside information that analysts have no ethics, all of the analysts rating BX are under 5’6”, and maybe B’stone really is buy-worthy. But you’d know better than us. Do tell.
Wall St. rates Blackstone’s stock a (you guessed it) “buy” [Reuters Blog]
Despite analysts' rave Fortress, Blackstone plunge [Reuters]