Zachary Scheidt

Blackstone: Benefiting from Improving Economic Trends

Squeaky,

While I can't argue with your experience - I don't know who you work for or what type of oversight Blackstone offers - the company has a very strong track record of turning companies around leading to profitability. BX could certainly play the "smoke and mirrors" game for a time, but if this were to occur, investors would balk at purchasing IPOs coming out of BX. Eventually the plan would backfire.

While the situation is certainly not perfect, Blackstone actually offers economic benefit, and the returns are very lucrative - for the company AND for the investors.

Thanks for the comment...

zachstocks.com

Blackstone Group: Recovery Marches On

It was impressive to see BX retaking it's 50 day on strong volume. I'm drinking the kool aid for now - the opportunity to liquidate positions at attractive levels should still be available, how else can you explain the popularity of the Hyatt deal?

The business model follows a "heads we win, tails we break even" as the company basically allows investors in its funds bear most of the risk while the potential for incentive allocations can be tremendous.

zachstocks.com/2009/11.../

I'm bullish - holding in the ZachStocks Growth Model - and own $15 calls personally.

Why I'm Adding More Blackstone Group

Actually while it may be considered shady, that business practice ends up putting serious capital in the hands of (Blackstone) shareholders. As owners of the stock, you participate in both the management fees as well as the incentive allocations from these transactions.

So when Blackstone takes their investor's dollars (not BX shareholders, these are investors in Blackstone funds), borrows additional capital (The fund borrowing - usually not a liability for BX shareholders), buys out a company at $500 million, and then sells it for $2 billion a year later, shareholders actually receive somewhere in the neighborhood of $300 million in incentive fees.

This is what will likely drive the stock higher in the next few quarters. There are plenty of opportunities to buy distressed assets and Blackstone has the capital to put to work.

Now not every deal will have this kind of return, but again, the majority of the risk is borne by the investors in the Blackstone FUNDS - not by shareholders of BX

zachstocks.com

Blackstone Earnings: Mixed Results

Nice catch guys - I didn't see the fine print on the distribution.

Glad to know there's less of a conflict of interest there. Definitely makes me feel more comfortable owning the stock.

Zach
zachstocks.com

Silver Linings in Blackstone Group

Thanks guys - still a long way to go for this name to regain its former status, but I'm encouraged that investors are beginning to see the long-term prospects instead of the short-term challenges. Alternative investments should continue to attract assets and Blackstone remains a leader in the category.

Appreciate the comments!
Zach
zachstocks.com

Is the Tide Turning for Blackstone?

I've found it very difficult to "run the numbers" on Blackstone as the business has so many moving parts. It could be that they do not have their own capital (balance sheet) available to invest, but the funds that they manage (which include their own capital already invested in these funds) may have plenty of cash or at least undrawn credit lines. It may be a bit tough to pin down the specifics, but the overall environment and the fact they are raising new assets from investors should propel them over the long-run.

Thanks for the comment!
Zach
zachstocks.com

Calling a Turn in Blackstone Group

Kang, I sold my position from the IPO when the deal went south (damage control) but yes, I have begun building a position with a much lower average price

All, Thanks for the comments. Many are right in that the numbers are difficult to come up with. Management's guidance gives little concrete to work with simply because there must be assumptions as to the value of holdings for which there is no current market. However as sentiment begins to turn and the market begins to find its feet (even if temporarily), Blackstone should get a strong trade-able lift.