After months of hype, hoopla and no small amount of controversy, the Blackstone Group went public on Friday, and with it, lost its "private equity" status.
Its shares, whose symbol is BX -- as in bucks -- was clearly a success. The offering -- priced at US$31, the high end of the expected range -- opened 18 percent higher at US$36.55 and ended trading at US$35.06
The opening was treated almost like a Hollywood premiere at the New York Stock Exchange, where television trucks from networks around the world lined up to report the offering, the biggest on Wall Street and the most high profile since Google went public in 2004.
PHOTO: AP
Blackstone chief executive Stephen Schwarzman, who has attracted much criticism in recent weeks amid the unwanted attention that the stock offering has put on the industry, was not in attendance.
But Tom Wolfe, the author of The Bonfire of the Vanities, was. Walking the floor of the exchange just before the opening, he told a CNBC reporter: "We may be witnessing the end of capitalism as we know it."
Still, the successful offering could presage a wave of followers among private equity firms. Kohlberg Kravis Roberts is considering an offering, as is the Apollo Group.
The stock offering came the same day that more than a dozen Democrats introduced legislation to increase the tax on "carried interest," the performance income earned by many partnerships, including private equity firms. The tax would rise to the ordinary income tax rate of 35 percent, up from the 15 percent capital gains rate now in place. Last week, a bipartisan bill was introduced to increase taxes on firms like Blackstone. Some had speculated that the bill would kill Blackstone's offering or at least lower its valuation, but it appeared to do neither.
Blackstone's offering did not pop the way Fortress Investment Group's offering did in February. That offer surged 68 percent, to US$31, after it raised US$634 million. Those shares have fallen 20 percent since, in part on worries about the possible impact of increased taxes.
With the help of an army of underwriters, 17 in all, Blackstone sold 133.3 million common shares, or a 12.3 percent stake. The company has already sold a US$3 billion nonvoting stake to a Chinese state-owned investment company.
The firm, which started in 1985 with just US$400,000, had a market value of US$38 billion at the close of trading on Friday, giving it a higher market value than more established financial players like Bear Stearns, the investment bank.
No one will reap more from the offering than Blackstone's two founders. With a 24 percent position in the firm, Schwarzman will hold a US$7.7 billion stake and could earn up to US$677 million from the offering's proceeds. That is on top of the nearly US$400 million in compensation he took home last year.
The firm's chairman, Peter Peterson, who is retiring, will earn US$1.88 billion from the offering and will retain a 4 percent stake.
China’s Huawei Technologies Co (華為) plans to start mass-producing its most advanced artificial intelligence (AI) chip in the first quarter of next year, even as it struggles to make enough chips due to US restrictions, two people familiar with the matter said. The telecoms conglomerate has sent samples of the Ascend 910C — its newest chip, meant to rival those made by US chipmaker Nvidia Corp — to some technology firms and started taking orders, the sources told Reuters. The 910C is being made by top Chinese contract chipmaker Semiconductor Manufacturing International Corp (SMIC, 中芯) on its N+2 process, but a lack
NVIDIA PLATFORM: Hon Hai’s Mexican facility is to begin production early next year and a Taiwan site is to enter production next month, Nvidia wrote on its blog Hon Hai Precision Industry Co (鴻海精密), the world’s biggest electronics manufacturer, yesterday said it is expanding production capacity of artificial intelligence (AI) servers based on Nvidia Corp’s Blackwell chips in Taiwan, the US and Mexico to cope with rising demand. Hon Hai’s new AI-enabled factories are to use Nvidia’s Omnivores platform to create 3D digital twins to plan and simulate automated production lines at a factory in Hsinchu, the company said in a statement. Nvidia’s Omnivores platform is for developing industrial AI simulation applications and helps bring facilities online faster. Hon Hai’s Mexican facility is to begin production early next year and the
AVIATION BOOM: CAL is to renew its passenger and cargo fleets starting next year on record profits as aviation continues to return to pre-pandemic levels China Airlines Ltd (CAL, 中華航空) yesterday said it is optimistic about next year’s business outlook, as the airline continues to renew its fleet on expectations that global passenger traffic would maintain steady growth and air cargo demand would remain strong. From next year to 2028, the airline is to welcome a new Boeing Co 787 fleet — 18 787-9 and six 787-10 passenger aircraft — to cover regional and medium to long-haul destinations, CAL chairman Hsieh Shih-chien (謝世謙) said at an investors’ conference in Taipei. The airline would also continue to introduce Airbus SE 321neo passenger planes and Boeing 777F cargo jets,
Who would not want a social media audience that grows without new content? During the three years she paused production of her short do-it-yourself (DIY) farmer’s lifestyle videos, Chinese vlogger Li Ziqi (李子柒), 34, has seen her YouTube subscribers increase to 20.2 million from about 14 million. While YouTube is banned in China, her fan base there — although not the size of YouTube’s MrBeast, who has 330 million subscribers — is close to 100 million across the country’s social media platforms Douyin (抖音), Sina Weibo (新浪微博) and Xiaohongshu (小紅書). When Li finally released new videos last week — ending what has
RSS