Shares in The Blackstone Group have plunged through their initial offering price of $31 per share.
At press time, shares in “BX” were trading just a few cents below $31. The share price drop is a worrying sign for a highly anticipated initial public offering, one of the largest in US history.
If Blackstone’s market capitalisation remains below its debut price, investors may be less willing to accept rich valuations for any further private equity firm IPOs.
In recent days, a wave of bad news out of Capitol Hill has worried investors that Congress may be successful in imposing a harsher tax regime on publicly traded private equity firms, which would hit earnings.
In the meantime, shares in Fortress Investment Group, another recent addition to the New York Stock Exchange and a publicly traded partnership with a structure similar to Blackstone’s, were trading at a new low below $23 per share, having traded as high as $33 per share in mid-April.