After months of hype, hoopla and no small amount of controversy, the Blackstone Group went public on Friday, and with it, lost its "private equity" status.
Its shares, whose symbol is BX -- as in bucks -- was clearly a success. The offering -- priced at US$31, the high end of the expected range -- opened 18 percent higher at US$36.55 and ended trading at US$35.06
The opening was treated almost like a Hollywood premiere at the New York Stock Exchange, where television trucks from networks around the world lined up to report the offering, the biggest on Wall Street and the most high profile since Google went public in 2004.
PHOTO: AP
Blackstone chief executive Stephen Schwarzman, who has attracted much criticism in recent weeks amid the unwanted attention that the stock offering has put on the industry, was not in attendance.
But Tom Wolfe, the author of The Bonfire of the Vanities, was. Walking the floor of the exchange just before the opening, he told a CNBC reporter: "We may be witnessing the end of capitalism as we know it."
Still, the successful offering could presage a wave of followers among private equity firms. Kohlberg Kravis Roberts is considering an offering, as is the Apollo Group.
The stock offering came the same day that more than a dozen Democrats introduced legislation to increase the tax on "carried interest," the performance income earned by many partnerships, including private equity firms. The tax would rise to the ordinary income tax rate of 35 percent, up from the 15 percent capital gains rate now in place. Last week, a bipartisan bill was introduced to increase taxes on firms like Blackstone. Some had speculated that the bill would kill Blackstone's offering or at least lower its valuation, but it appeared to do neither.
Blackstone's offering did not pop the way Fortress Investment Group's offering did in February. That offer surged 68 percent, to US$31, after it raised US$634 million. Those shares have fallen 20 percent since, in part on worries about the possible impact of increased taxes.
With the help of an army of underwriters, 17 in all, Blackstone sold 133.3 million common shares, or a 12.3 percent stake. The company has already sold a US$3 billion nonvoting stake to a Chinese state-owned investment company.
The firm, which started in 1985 with just US$400,000, had a market value of US$38 billion at the close of trading on Friday, giving it a higher market value than more established financial players like Bear Stearns, the investment bank.
No one will reap more from the offering than Blackstone's two founders. With a 24 percent position in the firm, Schwarzman will hold a US$7.7 billion stake and could earn up to US$677 million from the offering's proceeds. That is on top of the nearly US$400 million in compensation he took home last year.
The firm's chairman, Peter Peterson, who is retiring, will earn US$1.88 billion from the offering and will retain a 4 percent stake.
DAMAGE REPORT: Global central banks are assessing war-driven inflation risks as the law of unintended consequences careens around the world, spiking oil prices Central banks from Washington to London and from Jakarta to Taipei are about to make their first assessments of economic damage after more than two weeks of conflict between the US and Iran. Decisions this week encompassing every member of the G7 and eight of the world’s 10 most-traded currency jurisdictions are likely to confirm to investors that the specter of a new inflation shock is already worrying enough to prompt heightened caution. The US Federal Reserve is widely expected to do exactly what everyone anticipated weeks ahead of its March 17-18 policy gathering: hold rates steady. The narrative surrounding that
Taiwan Semiconductor Manufacturing Co’s (TSMC, 台積電) share of the global foundry market rose to almost 70 percent last year amid booming demand for artificial intelligence (AI), market information advisory firm TrendForce Corp (集邦科技) said on Thursday. The contract chipmaker posted US$122.54 billion in revenue, up 36.1 percent from a year earlier, accounting for 69.9 percent of the global market, TrendForce said. Its share was up from 64.4 percent in 2024, it said. TSMC’s closest rival, Samsung Electronics, was a distant second, posting US$12.63 billion in sales, down 3.9 percent from a year earlier, for a 7.2 percent share of the global market. In the
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
At a massive shipyard in North Vancouver, Canadian workers grind metal beams for a powerful new icebreaker crucial to cementing the country’s presence in the increasingly contested arctic. Icebreakers are specialized, expensive vessels able to navigate in the frozen far north. And “this is the crown jewel,” said Eddie Schehr, vice president of production at the Seaspan shipyard. For Canadian Prime Minister Mark Carney, who heads to Norway next Friday to observe arctic defense drills involving troops from 14 NATO states, Canada’s extreme north has emerged as a strategic priority. “Canada is and forever will be an Arctic nation,” he said ahead of
RSS