We’re almost halfway through the first trading day for shares of Blackstone Group, which opened this morning at $36.45. The stock seems to be holding at that level, hovering just above and below the opening price on volume that is fast approaching 100 million shares traded.
But some are already starting to grumble that Blackstone’s opening day performance has been a bit, well, lackluster. Peter Cohan at Blogging Stocks contrasts the performance of Blackstone shares with those Fortress Investment Group, which rocketed upward on the first day they traded.
“Fortress's stock rose 68% on its first day of trading in February 2007. This first-day pop may have inspired Blackstone to move forward with an IPO but Blackstone's offering seems to have been greeted with a relative yawn,” Cohan writes.
Blackstone had the decided disadvantage of opening on a day when the overall market moved downward and traders were distracted by a rejiggering of the S&P 500. The Dow Jones Industrial Average is down over 100 points as we go to press. But Cohan thinks there is more going on here, including tax issues that threaten to hurt the bottom line of the company and rising interest rates that may make its deals more expensive.
“I think investors realize that not only does this offering suggest specific problems with Blackstone's offering but it sends a signal about the outlook for private equity,” he writes.
Not everyone agrees that Blackstone’s performance indicate any problems.
“It’s clear that Fortress got jacked by their underwriters. A lot of institutional investors made a fortune on that opening. Schwarzman seems to have cut a better deal for Blackstone here, pricing the deal far closer to the market price while still giving those in the IPO a good shot at upside,” an investment banker told DealBreaker.
The Wall Street Journal’s Market Beat blog asks its readers what will happen to the shares today. Guesses are all over the place, going as high as a $90 close. So we’re turning to a higher authority—the DealBreaker readership. In the comments section below leave your best guesses at where BX will close. Closest guess without going over gets a copy of Dana Vachon’s Mergers & Acquisitions and a copy of Jack and Suzy Welch’s Winning: The Answers.
Blah, blah Blackstone, have you any bulls? [BlogginStocks.com]
Blackstone’s Bonanza [Market Beat]
Posted by EV, Jun 22, 2007 1:57PM
$36.42