I've recently read a fairly large number of articles and analyst comments on the news that Blackstone's stock price is down more than 50% since IPO this summer. Commentators go on in discussing and debating the reason for such collapse, which is my view was one of the most predictable one in history.
It might sound a litte extreme as a view but I'm firmly convinced that management companies of asset managers and private equity firms should never never go public for a number of reasons among which:
- They don't need raise cash to develop
- Business relies heavily on people should find ways to retaain key people rather than proving liquidity to their shares
- The performance fee related income is by nature highly volatile in the mid term... while the excess management fee they show as profit is basically result of a market imperfection that at some point will go away
- Their founders and private shareholders are way too shrewed as investors not to know all of the above.
A couple of extra question marks comes to my mind when I think to this specific situation:
How can financial analysts, bankers and private bankers be that naive in not wondering why should they buy stock from the group CEO and founder in such a context ? and Most Importantly in my personal view: why should mature multibillionaires executives and entrepreneurs (such as founders of such firms) hurt their own reputation by screwing up small shareholders ?
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