Blackstone Hits Jackpot

Right now, Blackstone Group (BX) CEO Stephen Schwarzman is probably digging into a heaping pile of $40-per-claw stone crabs.

The private equity firm's much ballyhooed initial public offering has made Blackstone and its executives uberwealthy. Schwarzman is seeing his net worth balloon by $7.9 billion and retiring co-founder Peter Peterson is set to bag $1.88 billion.

So what's the scorecard on the nation's debut private equity offering?

Early demand had been reported on TheStreet.com as heavy, at about five to six times available share supply. The appetite for Blackstone shares continued to escalate throughout the week, with many reports saying investors were capable of taking down 10 to 12 times the 133 million shares being fed into the Street.

All that demand suggested Blackstone might skyrocket in its NYSE debut, a la Nymex (NMX), which shot up 125% in its first day of trading last November.

But it's important to note that the market environment that Blackstone is facing is entirely different. Let's ignore all the firestorm of grousing on the Capitol Hill about private equity tax loopholes, which could have soured investor appetite. The market itself plummeted partly on credit concerns tied to some Bear Stearns (NMX) hedge funds. Market participants are worried that the blowup of funds betting on the subprime mortgage market might be farther reaching.

But Blackstone still rose considerably, with shares closing up 12% on volume of nearly 100 million common units. Shares reached earlier were up as much as 21%.

Cantor Fitzgerald IPO trader Sal Morreale thinks the company and its underwriters scored an A in executing and pricing the deal. He believes Friday's closing share price reflects as much.

"The stock has held up and it's still up 4 points," Morreale says. "Even with this type of volume it absorbed really well on the Street," he adds.

"Now that the [Blackstone] circus is over I'm going home," he adds.

Blackstone shares performed well even as Fortress(FIG) got smacked down 7% -- almost as if investors were swapping out of the hedge fund shop to hop on the Blackstone bandwagon.

But Fortress' performance is worth noting since the stock has languished a bit since being traded into the market back in February at $18.50. Granted, shares of Fortress are up 40% since it priced. But the stock is down more than 30% since it peaked earlier this year.

"It had a nice run today," Morreale says of Blackstone.

With Congress hot on the trail, it'll be interesting to see how long Blackstone's run will be.

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