NEW YORK (TheStreet) — The epic rise of Caesars Entertainment shares — and their subsequent fall after a February initial public offering — is as an early read on an investment boom that will connect private equity financiers with ordinary stock investors.
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Private equity firms are expected to look at share sales like Caesars Entertainment as a way to begin exiting buyouts in coming years. Those soon to be public investments, and a string of recent multi-billion dollar IPO’s, give investors a new set of stocks to pick over. But buyer beware those companies may increasingly be weighed down by their former owners.
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aRecently IPO’ed stocks like Caesars Entertainment have a private equity share overhang




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When private equity firms Apollo Global Management and TPG Capital launched Caesars Entertainment onto public markets they likely didn’t take a near doubling of the casino operator’s shares to $15.39 as a big victory. That’s because after trying for a $531 million IPO in November 2010, the buyout investors settled on an offering of just 2% of the company’s shares, raising $16.9 million. While Apollo and TPG didn’t sell shares in the offering and won’t in a possible 34.7 million share follow up stock sale, their still giant stake in Caesars Entertainment is indicative of how large privately held share stakes can weigh on new offerings.
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