Word: schwarzman
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...head of Blackstone group and the new "King of Wall Street" (according to FORTUNE), Stephen Schwarzman is said to pay himself $300 million or more a year. He may already have accumulated as much as $10 billion, and if, as expected, Blackstone goes public, he will pocket billions more...
...What do Schwarzman and Blackstone do for all this money? Oh, this and that, but mainly they buy publicly traded companies, take them private (that is, replace the public stockholders with private equity from institutions and rich individuals), do some abracadabra that increases the companies' value and then take them public again. The $20 billion to $40 billion that Blackstone is said to be worth--Schwarzman may own 40% of that--does not include the value of any company that it happens to own. It is solely the value of the abracadabra. Blackstone and other private-equity firms collect...
...stock market deliver that $10 billion in value? Why does it take Schwarzman and crew to squeeze it out (for themselves)? Some say it's the short-term perspective of the investing public. Some say it's excessive regulation, most of which doesn't apply to private-equity investments. Whatever the explanation, the billions earned by private-equity operations aren't "created," as the whimsical conceit of Wall Street troubadours would have it. These billions are a toll charge collected from ordinary investors...
...Schwarzman is frank about this: "I think the public markets are overrated," he has said. Anyway, if you think private-equity firms are ripping off the rest of us, you'll soon be able to join in the rip-off yourself when Blackstone goes public...
...with global chops who would aggressively cut costs and implement a viable strategy. A Blackstone spokesman confirmed that the company is unhappy with Telekom's share price, but declined to comment on Ricke's performance. Still, Ricke doesn't appreciate the interference, and his relationship with Blackstone boss Stephen Schwarzman has chilled so much that Ricke refused to pay him a visit in New York last month when he was in town. After issuing a profit warning in August, though, Ricke presented the supervisory board with a plan to cut 67,000 jobs, boost revenues and make Telekom the most...