Everyone Wants In on Blackstone Deal

Blackstone's IPO is shaping up as a huge hit on Wall Street, even if some people can't stop sweating the firm's tax outlook.

The private-equity shop's $4.75 billion initial public offering is slated to be priced after the market closes Thursday. The deal is drawing frenzied demand, according to observers who track the IPO market.

One watcher said demand translated to an oversubscription from hungry investors equivalent to five to six times the shares being offered. That could mean Blackstone will see a spike reminiscent of derivatives exchange Nymex (NMX), whose shares more than doubled on their open last November and ended up with a 125% first-day gain, and hedge fund firm Fortress (FIG), which registered a 68% first-day gain back in February.

Blackstone is planning to sell 133 million so-called partnership units at $29 to $31 apiece. Shares are due to start trading Friday morning on the New York Stock Exchange.

The news comes as the Senate Finance Committee has placed a bull's-eye on Blackstone CEO Stephen Schwarzman. A bill under consideration would tax the firm and similar outfits at 35% or so -- compared with the 17% rate that partnerships like Fortress and Blackstone pay under current laws.

Fortress shares fell 6.5% Friday on news that some on Capitol Hill are aiming to ratchet up taxes on private-equity and hedge fund firms.

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