Might Blackstone Go Private?

At lunch today with Mick Weinstein of Seeking Alpha, I wondered whether Blackstone, which currently has a market capitalization of around $2 billion, might not be a takeover candidate. After all, it would be something of a jewel for many big banks.

Mick made the obvious point that Blackstone isn’t controlled by its public shareholders, it’s controlled by Steve Schwarzman, who would never sell for a single-digits sum. Which is absolutely true. But that doesn’t mean the public shareholders might not get bought out — by Steve Schwarzman.

After all, Schwarzman has said that "this kind of environment is tailor-made for making absolute fortunes in the private-equity business" — even as being a public company is clearly not helping him in the slightest. And Wes Edens, the CEO of Fortress Investment Group is already, um, joking about going private:

He quipped that the market had cheapened the value of Fortress’s portfolio companies so much that he would be willing to buy them all back. He also joked that if Fortress stock fell much further, to $1, he would institute a hostile takeover of his own company.

Schwarzman and Edens certainly have the ability to take their companies private. It’s what they’re used to, and their life was much happier back in those days. So who’s going to stop them?

I ought to mention a couple of other things I talked about with Mick: firstly, that Seeking Alpha entry about Microvision which got pulled following complaints from the company. It turns out, in light of subsequent events, that it was pretty much on the money. But it was never reinstated, because the author wouldn’t return emails or have any real contact with Seeking Alpha. Without any communication with an author, Seeking Alpha won’t publish anything.

Indeed, they need not only communication, but also your real identity: Notable Calls was dropped from Seeking Alpha because the author wouldn’t reveal his identity to Mick. A shame, because it’s an excellent blog.

Mick also talked about ways in which Seeking Alpha might do better by its contributors, without necessarily going down the revenue-share route. There are moves afoot to allow contributors to advertise for free on their own pages; the Seeking Alpha team has also constructed a "top contributors" algorithm which might prove popular. And there’s even noise about moving to Disqus for comments, which would be great, since one of the most annoying things about SA is the fact that you end up with two different comments streams. My suggestion was a financial-services tab, which could be populated with contributors’ firms.

The fact is that most of Seeking Alpha’s contributors are simply not in the kind of financial position where a revenue-share agreement would make any difference to them. But there are other things which they would like, and which Seeking Alpha might be able to provide. The more of them that SA implements, the happier its contributors are likely to be.

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