Blackstone Group (BX:NASDAQ) Down $8 per share
But no matter how you slice it, Blackstone's stock went down most likely because they bought high and sold low. That's called getting scammed in Vegas, just so you know. I've had it happen to me at a strip club more than once.
This transaction is a good example of how the Las Vegas media has been spinning the news since the Las Vegas Review-Journal was founded in 1909.
Las Vegas Locally posted on Twitter that Blackstone Group sold the Cosmopolitan in Las Vegas for $5.65 billion. She included a link from the Las Vegas Review-Journal the read with the headline, "Cosmo sold in $5.6B deal; MGM to take over resort operations."
I immediately checked my stock watch list. "BlackStone stock should go through the moon", I said out loud. But nope. It was down. What happened? I checked the Motely Fool.
Cosmo sells in a lease-back deal
That's a much different headline from what the Las Vegas Review-Journal wrote and what was written by the local bloggers. Cosmo sells for $5.65 billion? If were true then Blackstone's stock would have gone to the moon. They only paid $1.73 billion. Instead, Blackstone sold the business for $1.625 billion when they were in the hole for $173.5 billion since. That's not a gain, that's a loss and that's why the stock dropped.
Las Vegas Bloggers on Twitter work in tangent with the Review-Journal to promote false news
A lease-back deal is very different than a normal real estate sale. I did a similar deal when I was the C.E.O. of a True Value Hardware franchise in West Linn, Ore. When the mortgage crisis hit in 2008, banks and vendors were calling their notes and shortening their credit terms. I needed to free up some cash fast. I put a portion of the hardware business that was not doing as well as as parts of the business up for sale on BizBuySell.com.
The Nursery sold plants. It was a huge business at the hardware store but competition from newer, larger nurseries and a recently opened Home Depot in the area had caused a dropped in revenues for the Nursery. I sold the nursery business and inventory for $33,000 and leased the space back to the new owner. That gave me some immediate cash plus additional cash flow each month. Later, the tenant turned out to be a real pain (as expected) but that's for another story.