Mark DeCambre
The leveraged buyout boom has ground to a screeching a halt, and credit worries have many hedge fund managers fearing the reaper.
But that hasn't stopped Citigroup(C Quote - Cramer on C - Stock Picks) from starting coverage of Blackstone Group(BX Quote - Cramer on BX - Stock Picks) with a buy rating. Citi co-led the IPO back in June, so anything short of a buy rating would be a real shocker. In all fairness, Blackstone is considered the crème de la crème of private-equity
shops. But as investors know all too well, that hasn't kept its stock from getting creamed.
The New York-based buyout shop, run by CEO Stephen Schwarzman, priced 113 million shares at $31 each back on June 20. Happy buyers saw the stock soar 13% the next day -- only to be hit by a steady slide in the days and weeks that followed. Even after Wednesday's modest gain, Blackstone's shares are down 38% from their peak and 22% below their IPO price.
Those numbers put Blackstone in some dubious company. John Fitzgibbon, analyst at IPOScoop.com, says Blackstone was the 16th-worst IPO this year as of Tuesday. (Menlo, Calif.-based medical device company Xtent (XTNT Quote - Cramer on XTNT - Stock Picks) is worst, down 43% since pricing at $16.)
So with the financial sector in free fall, is it really a good time to start betting on the still far-from-transparent world of private equity?
| Want more? Check out TheStreet.com TV video. Mark DeCambre wonders why Wall Street analysts are slapping buy ratings on faltering Blackstone shares. |  |
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