10 IPOs that flopped
Like comedy, the secret to IPOs is timing. In the case of the Blackstone Group's public offering, the timing couldn't have been worse.
Steve Schwarzman and Peter G. Peterson (pictured), co-founders of the private equity firm, are superstars of the investment world. Blackstone originally started life as a boutique M&A advisory firm, but soon went the merchant banking route. And their investments have paid off big. Blackstone's funds had returned an annual average of 23% since 1987. When the firm revealed in 2007 it was spinning off Blackstone Holdings, investors piled in. The company went public in June of that year in a deal valued at $4.1 billion, with Schwarzman and Peterson reportedly netting more than half of that. The stock launched at $31 a share.
Unfortunately for investors, the credit crisis was about to hit, and would dry up Blackstone's traditional sources of capital. Soon, investors stampeded out, and the stock fell 42% in its first year of trading. Today, the stock is trading around $12.