Anyone buying into the Blackstone (BX) IPO?

[Anonymous]

Private equity funds were based on the premise that the public markets are stupid and short sighted, plus the fact that debt is very cheap now.

They are flippers. The business model is similar to real estate flippers, except that they’re smarter at requiring cash flow to cover debt. They take debt, buy company, do some cosmetic resurfacing and sometimes some amputations, wait a bit, and sell out with great marketing.

For them, selling their companies off in public is their “exit strategy’, how to get paid.

When people with this attitude sell their own company public, what do you think that means?

Do you think their own valuation ideas are suddenly different now when it comes to their own business? Or maybe they are even more sharply focused on “Sell when the public can be fooled for the maximum price” when they are getting 100% of the transaction capital instead of their 20% skim off the top.

Berkshire Hathaway firstly is much more open, and secondly, they don’t have an ‘exit strategy’. They buy to keep a business because it is good. They sell when they think they made a mistake.

Berkshire Hathway thinks it loses money on transaction fees and so it is prudent and cautious about transactions, and keeps cash when it can’t put it to work in the way it feels to be a good investment. It invests its own money.

Blackstone etc—more specifically the ultra plutocratic partners—get PAID quietly and opaquely jiga-simoleons for each transaction—done by financing with Other People’s Money, debt or equity.

Blackstone revels in high leverage—cold cash is distributed to their partners humongous paychecks the moment it hits the bank account. Heads they win, tails somebody else loses.

And finally, Warren Buffet is unusually honest and ethical.

It seems that in just about every way that matters Berkshire Hathway is entirely different from Blackstone.

[davelj]

DrChaos, you managed to miss my point entirely. I brought up Berkshire Hathaway merely to point out that the fact Blackstone’s holdings would be mostly private should not be a big issue in its IPO because many other public companies – like Berkshire Hathaway – also held mostly private companies.

I agree that in just about every OTHER way Berkshire is entirely different from Blackstone. Actually I’d probably say “very” different as opposed to “entirely” different, but that’s a matter of semantics.

How you managed to read my post and get the idea that I was making a blanket comparison between Berkshire Hathaway and Blackstone – outside of the issue of the fact that they both invest in private companies – is a mystery to me.

[davelj]

DrChaos, you managed to miss my point entirely. I brought up Berkshire Hathaway merely to point out that the fact Blackstone’s holdings would be mostly private should not be a big issue in its IPO because many other public companies – like Berkshire Hathaway – also held mostly private companies.

I agree that in just about every OTHER way Berkshire is entirely different from Blackstone. Actually I’d probably say “very” different as opposed to “entirely” different, but that’s a matter of semantics.

How you managed to read my post and get the idea that I was making a blanket comparison between Berkshire Hathaway and Blackstone – outside of the issue of the fact that they both invest in private companies – is a mystery to me.

[davelj]

Carlmichael, I’d never begrudge someone the 10%-20% intraday profit they think they deserve. I’d say the odds of your getting an allocation of the IPO, however, are roughly 0% unless you’re a huge client of the underwriters. And buying it in the secondary market… well, hey, best of luck with that.

[davelj]

Carlmichael, I’d never begrudge someone the 10%-20% intraday profit they think they deserve. I’d say the odds of your getting an allocation of the IPO, however, are roughly 0% unless you’re a huge client of the underwriters. And buying it in the secondary market… well, hey, best of luck with that.

[Carlmichael]

Yea my chances of getting in the IPO are null I already verified I’d just have to get in and out on the open market. You know this is random but I get way better responses in this tiny private forum on some small San Diego themed site than on most mega financial forums.

[Carlmichael]

Yea my chances of getting in the IPO are null I already verified I’d just have to get in and out on the open market. You know this is random but I get way better responses in this tiny private forum on some small San Diego themed site than on most mega financial forums.

[HereWeGo]

Carl-
If you can answer the question, “Why is Blackstone a better stock investment than Fortress”, then you might go ahead and make the investment.

Personally, I don’t know the answer to that question, either way.

edit – $31/share … public trading opens tomorrow.

Anyone buying? On the one hand, FIG is worrisome. On the other hand, the “subscriber” count for the IPO was crazy, and there seems to be lots of non-US demand for the stock.

Hmm.

[HereWeGo]

Carl-
If you can answer the question, “Why is Blackstone a better stock investment than Fortress”, then you might go ahead and make the investment.

Personally, I don’t know the answer to that question, either way.

edit – $31/share … public trading opens tomorrow.

Anyone buying? On the one hand, FIG is worrisome. On the other hand, the “subscriber” count for the IPO was crazy, and there seems to be lots of non-US demand for the stock.

Hmm.

[drunkle]

what about buying put options? you know the stock will jump, one way or the other then gradually slide…

[drunkle]

what about buying put options? you know the stock will jump, one way or the other then gradually slide…

[4plexowner]

Doesn’t it give you a warm fuzzy that they moved the IPO forward a week?

Caveat emptor

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1957766.ece

[4plexowner]

Doesn’t it give you a warm fuzzy that they moved the IPO forward a week?

Caveat emptor

http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article1957766.ece

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Maybe that cheap money (Borrowed) used to finance the purchase of these companies isn’t going to be that cheap in the near future ???

Or the companies to buy not all that cheap either

Just a thought ..

[The-Shoveler]

Nor_LA-Temcu-SD-Guy

Maybe that cheap money (Borrowed) used to finance the purchase of these companies isn’t going to be that cheap in the near future ???

Or the companies to buy not all that cheap either

Just a thought ..

[Author]

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