The Blackstone IPO

By Joe Ponzio on June 25, 2007

It seems as though everyone is talking about Friday's Initial Public Offering of Blackstone Group (ticker: BX). With all the chatter, people are wondering: Should I buy it for the long-term? Is this thing going to grow like crazy?

If you feel like gambling, you are more than welcome to horse around in BX, or any IPO for that matter. Otherwise, what do you know beyond the hype? Sure—they're in private equity. Yes—they are in bed with Merrill Lynch. Of course—the executives are worth a ton of money. But what about their business?

When buying stocks, you are buying a piece of a business. What do you truly know about Blackstone's business? Does it generate a lot of excess cash? Does it have a consistent, growing history? Does the business give you enough confidence that you could buy the stock—and then ignore it for five years?

One of the most powerful tools you have in your arsenal is your ability to say, "no." If you do not find that you are 100% confident in and comfortable with your investment, why commit any of your money to it? As with most IPOs, there is not enough information (at least 10 years worth) for me to predict, with any degree of confidence, what the future will hold for this company.

Let the gamblers gamble. Why not wait for companies you know can grow?

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• The Blackstone IPO