Investors saw big losses in the markets today, except for the privileged few who rode the Blackstone Group LP (BX) to nice gains on its first day of trading. 

Could this be a great new divergent indicator? Everytime a private equity firm sell shares to the public, should investors should dump their shares? After reading details of this public offering, I have to question why I would invest in an entity where most of my money went to a select few management individuals. Is this a complete stock swindle or what? Let's see, a firm whose specialty is taking companies private is going public and asking investors to invest in something that may or may not make money for several years to come. Not with my money! In fact, I am so convinced that this deal stinks that I am shorting the stock at $35.98 as I write this.

This event will also convince other private equity firms to go for the walk-off homerun by selling shares to "joe public", but I hope regulators and lawmakers will engage in more scrutiny to protect investors who may not understand the risks they are taking by supporting these types of firms. If my money was going to support a new promising drug, help expand an alternative energy company or finance some other worthwhile endeavor, at least there is an incentive for the company to succeed. Where are the incentives here? How many jobs will be lost in the business of buying companies and trying to turn them around? 

For the most part, I am favorable towards any firm that dives into the public investment pool with grand plans to reward shareholders, but until firms like this show a track record to investors, I remain skeptical.

Investing Ideas/Stocks  Thomas Chenoweth 

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