'Hot' Hotel Group Goes Public
"If, on a balmy evening, you've enjoyed a high-fashion cocktail served by a nearly nude nymph (or at least an aspiring actress or model) while seated poolside at the Delano Hotel in South Beach or on a mattress in the Mondrian's SkyBar in West Hollywood, then you may be tempted to dip into this week's IPO of Morgans Hotel Group (OTC: MHGC).
Morgans is the hotel company that owns these and seven other supercharged boutique properties in the U.S. and U.K. Management is hoping to raise some $275 million to pay down debt and make an acquisition when it goes public at a price that underwriters Morgan Stanley and J.P. Morgan Chase have pegged at between $19 and $21/share.
...Perhaps because Morgans is loaded with debt, hasn't turned a profit in at least three years, and is in the hands of a new management team that may have mastered finance but isn't known for the kind of fashion sense needed to keep its properties on the knife-edge of desirability in an increasingly competitive marketplace."
Thanks to Peter Slatin