As I posted earlier this month, Blackstone Group's CEO Stephen Schwarzman gave an interview to the Wall Street Journal with a compelling theme -- Schwarzman is the Napoleon of private equity. Napoleon-watch tracks his moves on the business battleground.
As Sarah Gilbert posted this evening, Blackstone priced its IPO at the top of the range, $31 a unit. It's worth emphasizing that people who buy these units will not be getting shares of stock -- not at all. Instead they'll receive master limited partnership units.
And as I discussed this afternoon on CNBC with Maria Bartiromo, the value of these units is likely to skyrocket tomorrow when they begin trading on the New York Stock Exchange. The reason is that the offering is seven times oversubscribed -- that means that orders for Blackstone's units exceed supply by a factor of seven!
I will go out on a limb here and predict that these Blackstone units will end the day at $90 a unit. This will leave Steven Schwarzman in the enviable position of having a net worth of roughly $23 billion. Not bad for a day's work. No wonder KKR wants to do an IPO.
Peter Cohan is president of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter.
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Reader Comments (Page 1 of 1)
6-21-2007 @ 9:11PM
hopflcd said...
Anyone buying into this theory is crazy and deserves what they get. If a mutual fund or pension plan buys into this theory, they should get sued by their investors. Absolutely absurd to think that anyone is worth this type of money.
6-22-2007 @ 4:52PM
monkley said...
Nice prediction, Peter. If you're ever asked to appear on CNBC again, please decline....in the interests of sanity and your own humiliation.
6-22-2007 @ 5:50PM
Sg said...
$90.
So what happened? 10 times over subscribed. Hot in Europe and Asia. And just a moderate fizzel. Is this the top of the market?