It's been a short, strange, and embarrassing existence as a public company for The Blackstone Group (NYSE:BX).

Nice timing
Since going public last June, shares have fallen nearly 80%, leaving its founders and top managers looking as if they cashed out ungodly amounts of wealth onto gullible public markets. Its co-founder, Steve Schwarzman, issued a mea culpa for spending $3 million on a birthday party during the peak of Wall Street's leveraged-buyout bonanza. That ill-advised celebration left him portrayed as an infamous "Wall Street fat cat" who's now blamed for helping to ravage the economy.

What goes up ...
Nothing seems to be going right these days. Blackstone issued third-quarter earnings that were about as grim as anyone expected. GAAP losses were $340 million, or $1.27 per share. Analysts were looking for a profit of $0.01 per share. Revenue came in at negative $160 million. A showing like that sure doesn't start the road to profits out on the right foot.

Shareholders' dividends -- a $0.30-per-share quarterly distribution that equates to a 16% yield at today's prices -- was kept alive this quarter, but Blackstone warned that it could be cut, possibly to zero, if market conditions don't improve. That fear alone probably accounts for the bulk of what drove shares down 12% yesterday.

What's next?
You'll remember that back in February, Blackstone announced a plan to help navigate around the credit crisis. It planned on bypassing embattled banks such as Goldman Sachs (NYSE:GS) and JPMorgan Chase (NYSE:JPM) to fund acquisitions and instead opted to go straight to investors to raise capital.

That worked for a while, but now nearly everyone's appetite for private equity seems to be dwindling. The Wall Street Journal reports that big investors such as pension funds are opting out of private equity and in some cases are trying to unload existing investments. The fallout could be pretty frustrating, since chaos in the financial markets will keep creating bargain buying opportunities that Blackstone may not be able to exploit, simply because it might not be able to raise enough cash.

Going forward, I'd keep an eye on one thing: a suspension of the dividend. Such a development could be what justifies selling shares, even if you're sitting on a serious loss. Blackstone has hinted that its compensation structure could mean posting GAAP losses for five years. If that dividend vanishes, shareholders are well justified to ask, "What's left for me?"

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Fool contributor Morgan Housel doesn't own shares in any of the companies mentioned in this article. JPMorgan Chase is a Motley Fool Income Investor recommendation. The Fool has a disclosure policy.