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May 3, 2007

All Business: A look at Blackstone's ‘Enron-esque' qualities

  • Blackstone uses fair-value option accounting, estimating eventual profits and immediately counting a portion of those gains. But if those profits aren't realized, there could be a big hit to earnings.
    • By RACHEL BECK
    AP Business Writer

    NEW YORK — Before investors rush to take part in Blackstone Group's much-anticipated IPO, they should know that the way the buyout king will value and book its profits has some Enron-esque qualities.

    That isn't meant to scare investors away from climbing aboard the Blackstone moneymaking machine. Nor is it an accusation that the private-equity firm is doing anything shady in accounting for its investments like the former energy giant did in the 1990s.


     
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