Investors Should Sit Out Blackstone's IPO: Analysts


Tom Taulli, author of "Investing in IPOs" and founder of, told CNBC’s “Power Lunch” that individual investors should sit out Blackstone Group’s planned IPO.

Most individual investors can’t get shares at the offering price and therefore must pay a hefty premium to buy in the aftermarket.

“I would not be buying,” Taulli said Thursday. “I suspect it will be at a premium. There’s a similar company called Fortress that went up a lot on the first day...I expect a lot of volatility. Unless you’re a big trader, I would not be buying.”

Russell Lundberg, chief investment officer at Barrett Capital Management, said individual investors should consider the tax implications before buying Blackstone’s shares.

“This is not a corporation – it’s a limited partnership,” Lundberg said. “Income passes through as they earn it, not as it’s distributed to you. That means you are going to be liable for income whether or not you sell your shares or receive a distribution. You may also have to file tax returns and pay taxes in different states, even if you don’t live there.”

Blackstone is expected to price its shares Thursday for trading Friday. The company plans to sell 1.33.3 million shares at $29 to $31 each and cold raise as much as $4.14 billion.