Comments on: Blackstone Group LP (BX) http://zachstocks.com/2007/11/blackstone-group-lp-bx-2/ Dynamic Investments for Exceptional Traders Tue, 31 Jan 2012 01:21:02 -0700 http://wordpress.org/?v=2.8.6 hourly 1 By: Chris Ng http://zachstocks.com/2007/11/blackstone-group-lp-bx-2/comment-page-1/#comment-2261 Chris Ng Mon, 26 Nov 2007 17:02:54 +0000 http://zachstocks.com/2007/11/blackstone-group-lp-bx-2/#comment-2261 I was also looking at BX recently and I was reaching the same conclusions as you. Then I started looking at the notes to the financials and stumbled across the granting of partnership units to employees as compensation. In Q3, the company states that there are 12 billion dollars outstanding as an expense over the next 6 years or so. While there is no cash impact, I feel there is a significant economic impact to existing unit holders. It is essentially the opposite of a stock buyback and 12 billion is a significant dilution of partnership units. Perhaps their earning power can overcome this, but I now have my doubts. Your thoughts? I was also looking at BX recently and I was reaching the same conclusions as you. Then I started looking at the notes to the financials and stumbled across the granting of partnership units to employees as compensation.

In Q3, the company states that there are 12 billion dollars outstanding as an expense over the next 6 years or so. While there is no cash impact, I feel there is a significant economic impact to existing unit holders. It is essentially the opposite of a stock buyback and 12 billion is a significant dilution of partnership units.

Perhaps their earning power can overcome this, but I now have my doubts. Your thoughts?

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