A class action law suit was filed yesterday against The Blackstone Group LP (NYSE: BX) "on behalf of its shareholders." The law suit was filed by Abraham, Fruchter & Twersky, LLP and it alleges that Blackstone failed to disclose the declining value of portfolio companies in the prospectus filed before the offering. Another suit also found its way to them as Coughlin Stoia Geller Rudman & Robbins LLP filed a class action suit against Blackstone.
Since its IPO, the stock has lost over half of its value. In the annual report filed in March, Blackstone wrote down $122 million on its investment in Financial Guaranty Insurance Company.
What is interesting from Blackstone is the disclosures and caveats in the various filings it has made. Some go on and on, while some other descriptions are vague or brief. What this boils down to more than anything is that suits like this get filed after shareholders lose money.
The company went public in June 2007 at a share price of $31.00 per share in an approximate $4.0 billion public offering. Since then, the stock has declined by over 50% to recent lows, although shares opened today at $17.85. The company hit a low of $13.40 in mid-March and has since recovered over $4.00 to its current trading level. The 52-week high is $38.00.
Today, shares are up almost 3%, on normal trading volume to $17.85. The suit(s) that have been filed and may still be filed might have had more of an emphasis a few weeks and few months ago. Since shares have recovered some 33% from the lows, this one might not get quite as much attention as class action suits against other public companies.
Class action suits head to Blackstone
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