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Carlyle falls below offer price as rubenstein plan fails by wgre ethbtn
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Carlyle falls below offer price as rubenstein plan fails |
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Business,Business News,Business Opportunities
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May 10, 2012 Carlyle Group LP (CG) sank below its $22 offering price in thefifth day of trading, following a discounted IPO with which thefirm sought to prove that shares in private-equity managers canrise. Carlyle, which had been trading in a range of 9 cents above its IPOprice for the past three days, fell 1.1 percent to $21.75 at theclose of trading in New York, after earlier falling as much as 4.4percent to $21.02. The Standard & Poor s 500 Index fell 0.7percent. The building that houses the Carlyle Group LP headquarters standsin Washington, D.C. Photographer: Andrew Harrer/Bloomberg .In marketing the offering, David Rubenstein, Carlyle s co-founder and co-chief executive officer, had told investors that thefirm was pricing the shares at a discount so that they would rise,compared with the trading losses experienced by peers such asBlackstone Group LP (BX) and Apollo Global Management LLC.
(APO)Carlyle s offering price was below the proposed range of $23 to$25 a share. Carlyle s share price had been stuck just above $22 from May 3through yesterday, as the S&P 500 slumped 2.8 percent in thesame period. To traders such as Larry Peruzzi, that was a sign thatthe private-equity firm s underwriters were shielding it fromlosses. The weak markets the last few days are helping to keep the stockfrom moving higher, Peruzzi, senior equity trader at CabreraCapital Markets LLC in Boston, said in an interview last week.
Hence an underwriter may be more willing to support a stock ifthey feel it is under pressure from macro and not micro factors. Carlyle s Market Value Randall Whitestone, a spokesman for Carlyle, declined to comment onthe share price. Carlyle sold about a 10 percent stake in the IPO, raising $671million. The IPO valued Carlyle at $6.7 billion, or 7.6 times lastyear s distributable earnings, according to data compiled byBloomberg. Blackstone, by comparison, has a market value of about $14.1billion, or about 20 times its 2011 distributable earnings.
Theearnings measure largely reflects profits made from sellingcompanies owned through buyout funds. Alternative-asset managers have almost universally lost money forinvestors following initial public offerings. Blackstone, based inNew York, has declined 59 percent since raising $4.75 billion in a2007 IPO, and Apollo has tumbled 37 percent since its 2011offering. Long Term Efforts Fortress Investment Group LLC (FIG) and Och-Ziff Capital ManagementGroup LLC (OZM), which held their own U.S. IPOs in 2007, have lost81 percent and 74 percent.
Oaktree Capital Group LLC has declined3.6 percent since its IPO last month. Rubenstein said in an e-mailed statement last week that he thinksthe firm accomplished its objective in the IPO. Our principal focus in the offering was to attract a large numberof highly respected institutional investors who support ouremphasis on cash earnings and who will support our efforts to growthe firm over the long term, Rubenstein said. Carlyle is scheduled to report first-quarter earnings before U.S.markets open on May 15. I am an expert from Shoemaking Machinery, usually analyzes all kind of industries situation, such as fold out beds , 60mm spotting scope.
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