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Blackstone Shares Praised as 'Best of Breed'

Wednesday, 27 Jun 2007 | 2:28 PM ET

Blackstone Group shares slid Wednesday, for the third straight day since its debut. Analysts are debating whether it's still worth owning -- and what it might mean for the success of future IPOs. On “Morning Call,” Peter Cohan, president of Peter S. Cohan & Associates, and David Menlow, president of IPOfinancial.com, gave their opposing viewpoints to CNBC’s Carl Quintanilla.

Should You Buy Blackstone?
Debating if Blackstone is still worth owning, with David Menlow, IPOfinancial.com president; Peter Cohan, Peter S. Cohan & Associates president; and CNBC's Carl Quintanilla

Cohan believes the golden era may be over for private equity, and says that investors don’t want to “stick around for the scary part.”

According to Cohan, the Blackstone offering presents complex tax issues and no legal recourse: “You’re getting a massive tax headache and massive losses due to high compensation,” he said. “I would not want to own this stock, I’d be running for the hills.”

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But Menlow believes that Blackstone is the company to own. “This is a stock that sucked the oxygen out of the marketplace for better than a week before the deal even came,” said Menlow. He declared, “The stock stands on its own merit. You are not going to be able to put financial models to this. This is going to be the ‘best of breed' and it’s going to move.”