When Private Equity Becomes Public

Tomorrow, Blackstone Group LP is issuing a $4.13 billion IPO (Initial Public Offering). This could be the beginning of a trend of other Private Equity companies turning into Public Private Equity companies. So basically how it works is this: You buy one share of Blackstone Group, and they take your money (and others' money) and use it to buy a new business, then sell that business for a profit, and then you get some of that profit (only a bit since you have one share).

This could be interesting as it will get normal wealth people into the Private Equity game.

Follow this stock: BX on the NYSE

Note: the link to the price quote won't work until the stock goes public. Also this isn't a recommendation to buy or sell any equities whatsoever.

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Anonymous Gary Anderson said...

This could be a great stock, unless of course the rates of interest rise, or if the leverage is too great for some of these takeovers if the economy slows down. If these guys have so much money why do they have to go public? Maybe they are afraid of these highly leveraged debt purchases and want to offer more cash?

23 June, 2007 22:27  
Blogger cclemens31 said...

I agree with your assessment. You definitely hit the nail on the head.

"If these guys have so much money why do they have to go public?"

Also though, they could feel that there are still enough companies that have been mismanaged and can still be turned around to make some money on them.

I do know this though, the market isn't stupid, and this "cash machine" can't be open forever.

24 June, 2007 00:12  

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