Blackstone Group, one of the most successful and largest of private-equity firms, started trading Friday, posting strong early gains, after its IPO priced at the very top end of its range Thursday.
Blackstone and the underwriters, led by Morgan Stanley, set a price of $31 per share, valuing the IPO at more than $4 billion. The stock is trading under the ticker "BX."
Run by CEO Stephen Schwarzman, Blackstone has been on a high-profile shopping spree of late, acquiring firms including Equity Office Properties Trust, Freescale Semiconductor and Biomet.
Some suspected a Blackstone IPO was in the works well before its official March announcement, in light of the successful February offering of Fortress Investment Group -- the first hedge fund to go public in the U.S. Indeed, CNBC's David Faber was the first to report Blackstone's plans on March 16.
Here's a sampling of our coverage.
The Big Winners
CNBC’s Bob Pisani reported that “The deal size they announced was the deal they made: 133.333 million shares.”
He explained that the deal contains a greenshoe, or an option to sell more shares than originally planned. “Traditionally, that’s 15% over allotment, which the underwriters can use -- and given the oversubscription to this [IPO], I anticipate that will happen.”
“Eventually, this deal will probably go to 153 million shares,” Pisani predicted. He added that the offering is “a great deal for Morgan Stanley and the underwriters.”
Waxman Raises The Stakes
Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Reform, wonders if events are happening too quickly. CNBC's Hampton Pearson reported that Waxman has asked the Securities and Exchange Commission to delay the Blackstone IPO until more can be learned.
Further, the California congressman wants his domestic policy subcommittee -- chaired by reform-oriented Rep. Dennis Kucinich (D-Ohio) -- to hold hearings "at the earliest possible opportunity" on the ramifications of the IPO.
Waxman did not specify what such hearings would focus on -- unlike Sen. James Webb (D-Va.), who asked federal authorities to scrutinize "national security implications" because of the Chinese government's stake in Blackstone.
The Senate Weighs In
In an exclusive interview with CNBC, Sen. Richard Shelby (R-Ala.), ranking GOP member of the Senate Banking Committee, said he's "concerned about the implications of taxes" on firms like Blackstone.
"A lot of these partnerships...bring liquidity and risk to the marketplace," Shelby said. He warned that stifling hedge funds and other private equity groups "could have impact on capital formation and the economy in general."
That's a fear shared by Chris Dodd, Democratic chairman of the banking committee: The leaders of the committee have requested that the Treasury Department and the Securities and Exchange Commission analyze the proposal to raise taxes on private equity funds going public.
Key Ideas for Investors
CNBC’s Melissa Lee told “Squawk Box” there are a handful of key points to keep in mind about Blackstone's planned IPO. Among these: Shareholders will have limited voting power and no right to elect general partners or directors.
Chairman and co-founder Stephen Schwarzman will pocket some $677 million, and co-founder Pete Peterson will make about $1.8 billion, according to company disclosures.
And the Senate is considering a proposal to hike taxes on private-equity firms that go public. If the bill becomes law, it would reduce Blackstone's profit. But Lee reports that the leveraged buyout boom is likely to continue -- and Blackstone Group may enjoy an edge over its competitors, by being among the first in the sector to go public.
Kenneth Heebner doesn't buy the Blackstone's hype. The CGM Capital Management strategist told "Closing Bell" viewers that "this stock may well go up" -- but "it won't go up as much as others."
Heebner believes interest rates are going to rise steadily, hindering the firm's ability to keep investing. He maintained that Blackstone is actually "selling at the peak" of its operating earnings.
And Heebner, who manages the portfolios of the CGM Realty Fund and CGM Focus Fund, thinks it's not only Blackstone that has reached its zenith. He sees the industry as "past its prime," and predicts that in the near future, "you might find mutual funds outperforming hedge funds."