If executives at Orbitz are feeling down about their dismal performance since floating shares last month, they may find comfort in the private equity firm that took them public: while Orbitz is down 20 percent from its offering price, Blackstone has dropped nearly 25 percent since its June debut. Together they’re two of the worst performing offerings this summer.

On the surface, Blackstone, the private equity giant, and Orbitz, the online travel  
Website, have little in common. But there is one key element linking the two: debt.

Blackstone acquired Orbitz when it bought Travelport, electing to spin-off Orbitz after the deal. Like most private equity deals in the last two years, the leveraged buyout of Travelport had Blackstone borrowing a hefty amount. Analysts believe that among the factors hurting Orbitz’s stock is the amount of debt on its balance sheet.

Its easy to blame a poorly performing IPO on uneasy markets, but offerings this summer have actually been a relative bright spot with the likes of VMware or E-House.

Obviously the debt factor for Blackstone is that the firm, like other private equity players, can’t get banks to loan them heaps of money for deals due to the credit crunch.

So the credit freeze has taken its toll on Blackstone and other publicly traded private equity firms while high debt loads have spooked investors looking at private equity-backed companies brought to market — like Orbitz, for example.      

The 10 largest private equity-backed IPOs last year had an average debt-to-equity ratio of 1.6, according to PricewaterhouseCoopers — dwarfing a ratio of 0.1 for offerings that weren’t backed by private equity.

E-House, up about 20 percent since its debut earlier this month, had a debt-to-equity ratio of 0.1, according to IPO Desktop. VMware, which has more than doubled since its August debut, had a ratio of 0.5.
 
By contrast, Orbitz and Dice Holdings have dropped about a fifth of their value since their debuts — with debt-to-equity ratios of 0.8 and 1.5, according to IPO Desktop.

Blackstone was trading at $23.68 on Monday, having debuted at $31 per share in June. Orbitz was trading at $11.96 after going public at $15 per share last month. The apple doesn’t fall too far from the tree.

(Image credit. “The Cleaver Family.” www.geocities.com/alcus2)