Marathon Acquisition's upcoming IPO is a risky run for investors.

Marathon, a so-called blank-check company founded by Wall Street veteran Michael Gross, is expected to price a $300 million stock offering on Tuesday night, according to sources close to the deal. The initial public offering is just another example of Wall Street's seemingly endless infatuation with blank checks -- fledgling companies in search of a business plan.

The deal is largely dependent on the resume of Marathon's sponsor, Gross, one of the founders of the $10 billion private equity outfit Apollo Management. Marathon is being pitched to investors as a chance to place a bet on Gross' reputation as one of Wall Street's master wheeler-dealers.

But some on Wall Street are becoming increasingly skeptical of blank-check deals and the willingness of investors to blindly hand cash to management with a theoretical "trust us" strategy.

"People are so completely oblivious, yet we'll give you all this money," says David Menlow, president of IPOFinancial.com. "I don't care how good the principals are, there is still a risk of investing into dogs."

Over the past three years, Wall Street has breathed new life into the blank-check model by pitching deals to hedge funds as a relatively safe way to invest in private equity. The blank-check company takes its publicly raised cash and tries to find something to buy with it. If the company can't find a deal within 18 months, the investors get most of their money back.

In the 1990s, blank-check stock deals got a bad reputation as the investment vehicles of choice for many unscrupulous stock promoters. But this new breed of blank-check IPOs are less barbaric because regulators now require the companies to impose more investor safeguards.

Still, the deals often are best for the founders, who get a ton of stock in return for a minimal investment.

Marathon's offering is particularly notable because it's the biggest blank-check offering filed to date. Moreover, at $300 million, it ranks as one of the larger IPOs of the year.

From Gross' perspective, running Marathon is easy work. After the offering, he will own nearly 20% of the company, even though he invested just $25,000 of his own cash into Marathon, according to the prospectus. With some 9 million shares in his pocket, Gross' meager cash investment translates into $0.0027 a share.

Meanwhile, investors in the IPO are expected to pay $8 for a share and a warrant to buy a future share.

Gross benefits handsomely if the deal is successful. But his risk in running Marathon is basically nothing if the deal falters. He and his two colleagues, Irwin D. Simon and Robert Sheft, can sell shares a year after Marathon completes its first acquisition. For that reason, some are staying away.

"We prefer to invest in a real company with real earnings," said one fund manager who asked not to be identified.

The deal's success will certainly be helped by the underwriting team. It's not every day a bulge-bracket investment firm, Citigroup ( C) in this case, shares the spotlight on an IPO with a third-tier investment firm such as Ladenburg Thalmann, a boutique bank that is responsible for running a large number of blank-check IPOs. UBS ( UBS) also is part of the underwriting team.

"You have big names leading the deals here. It's not 'Burn 'Em and Turn 'Em Securities' like it used to be," says Menlow.

In this case, the reason for Citigroup leading the IPO is fairly simple. Gross' relationships with the Ladenburg CEO spans back decades, to Northwestern University's Kellogg School of Management, where Gross attended graduate school with Mark Klein. And the Ladenburg CEO, Mark Klein, is the brother of Michael Klein , the chief executive officer of Citigroup's global banking operation.

Gross' founding status at Marathon poses other conflicts. He recently walked away from Apollo to pursue new opportunities, including running a multistrategy alternative investment manager called Magnetar Capital. Gross' involvement with Magnetar could keep Marathon from pursuing profitable acquisitions.

"Although Mr. Gross will endeavor to allocate acquisition opportunities in a fair and equitable manner, it is possible that we may not be given the opportunity to participate in certain acquisition opportunities that Mr. Gross determines to offer to Magnetar Financial LLC," the prospectus says.

For Marathon investors, the finish line could be a long way off.