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Black Stoned

Black Stoned

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Published by cvf
BLACKSTONED
Last year, breakingviews highlighted Blackstone’s rich price-tag and the risks associated with the industry’s ephemeral boom. The stock has since halved. How could this have happened? “Blackstoned” is the breakingviews Blackstone saga. We hope that you find it a compelling account of one of the most emblematic deals of the current financial crisis.
BLACKSTONED
Last year, breakingviews highlighted Blackstone’s rich price-tag and the risks associated with the industry’s ephemeral boom. The stock has since halved. How could this have happened? “Blackstoned” is the breakingviews Blackstone saga. We hope that you find it a compelling account of one of the most emblematic deals of the current financial crisis.

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Published by: cvf on Mar 17, 2008
Copyright:Attribution Non-commercial

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02/20/2014

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BLACKSTONED
 
Contents
Preface .......................................................................................1 
The benefits of going public
........................................................ 3
 Blackstoned
................................................................................ 5
 A different kind of company
........................................................ 7
 History repeats itself
................................................................... 8
 A Netscape moment
................................................................. 10
 You can't fool the public
............................................................ 12
 Luck or genius?
........................................................................ 13
 Living on borrowed time
........................................................... 14
 Moving the goal posts
............................................................... 16
 A (fictional) letter from Stephen Schwarzman on the proposedLBO of Blackstone Group
......................................................... 18
 
About us ..................................................................................24 Get breakingviews ..................................................................24 
 
 
breakingviews.com
- 1 -
Preface
When Blackstone listed itself less than a year ago, it was one ofa raft of deals that Wall Street likened to the investmentopportunity of a lifetime. For the first time ever, public investorswere being given a chance to stash their money alongsideSteve Schwarzman. What a disappointment this has turned outto be.Since going public in June, the company’s shareholders havelost half their investment. Meanwhile, the managers that soldstock in the IPO, such as founders Pete Peterson andSchwarzman, walked away with hundreds of millions of dollars.Leading up to the offering, breakingviews wasn’t shy in pointingout that Blackstone pushed the limits – with governance, price,and its statement in going public. After all, the company listedafter years of cataloguing the reasons companies performbetter in private. The $31 offer price valued the firm at asignificant premium to other financial institutions. It took just acouple of months before it slipped below breakingviews’ $21 ashare target price. And investors, who are now sobered by theirlosses, have non-voting shares with no say. How could thishave happened?This is the breakingviews Blackstone saga.
Rob Cox and Lauren Silva breakingviews.com March 2008 
breakingviews.com
- 2 -
Blackstone share price June 22 2007 to present
Jun-07 Jul-07 Aug-07 Sep-07 Oct-07 Nov-07 Dec-07 Jan-08 Feb-08
-50%
 
Blackstone share price June 22 2007 to present

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