Blackstone (BX) -- the best short on the street

Today's volatility is extraordinary.  It is times like these when shorting becomes a necessary strategy.  Anyone can come up with a list of shorts -- and on down days, they are mostly right.  But there is one that has broken all records as a short and should be on everyone's list.

It should come as no surprise that Blackstone, the private equity buyout group, which went public on June 22 to great acclaim is now one of the least attractive long positions on the street.  It's set share price of 31 rose to 35 on its first day.  Now, two and a half months later, it is at its low at 22, a 37 percent decline.  And, 22 is not the end of its ride down.  Just look at the charts.  It hardly moves up on strong days and always goes down hard on down days.  Shorts are risky in almost all instances, but this one is abot as good as they get.

If you want to sleep well during these highly volatile days, short BX and enjoy.  It is a terrible stock.


Max Lubetkin
Max Lubetkin: Max is BestCashCow's entertainment and specialty writer. He is a recent Dartmouth graduate and a forever fan of Big Green!

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  • DanS

    September 06, 2007

    I agree. I shorted it at an earlier low and I have slept well ever since.

  • Sam Cass

    September 06, 2007

    If the Fed cuts rates it might breathe some life back into private equity. I think this is risky.

  • chemicalladdie2005

    September 06, 2007

    The key financial statistics, if valid, look fantasic. Lots of cash, high income, low pe, low debt even I cannot figure out why BX has become so unpopular. Anybody got an anwser?

  • homegrownbeef

    September 06, 2007

    @chemicalladdie2005 - i think it's because in order to grow these companies need access to low cost funds. Depending on what happens in this market, these funds could disappear. If that happens, the engine that drives a leveraged buyout fund disappears. If rates drop then these guys are back in business so i'd watch the 10 year and see where it goes.

  • Easy Money

    September 06, 2007

    I am afraid that the easy money has been made on this one already. It may go down further, but it isn't going out of business.

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