When Blackstone took Hilton private in 2007, it was a time of extreme optimism in the LBO market. The deal was funded with a low percentage of equity and in the depths of the financial crisis, the deal looked to be a complete loser with bond prices plummeting. I give a lot of credit to Blackstone and the management team at Hilton for taking advantage of favorable credit markets to refinance debt, improving the financial condition of the company. In addition, management expanded the amount of rooms available through utilizing the franchising model, which requires very low capital expenditures. Also the membership program has become a real priority, which helps to bring about the recurring customer base to leverage Hilton’s large footprint. I wouldn’t be surprised to see the market look favorably at this Hilton IPO but I’d be hesitant to buy into this optimism. Price is the most important determinant of investment success and the smart money is selling for a reason. That doesn’t mean the stock can’t do well, especially because some of the proceeds from the IPO are being used to refinance debt, but this isn’t a great time in the cycle to be buying IPOs.