NEW YORK (CNN/Money) -
Shares of Genworth Financial Inc. sank as much as 3.8 percent in their first day of trading Tuesday in the biggest initial stock offering in the United States this year.
Genworth (GNW: Research, Estimates) shares sank as low as $18.75 from the IPO price of $19.50 but recovered and were off about 0.6 percent in afternoon trading.
In its initial public offering Monday, the life and mortgage insurance unit of General Electric Co. offered 145 million shares of Class A Common Stock to underwriters at $19.50, according to a statement from GE.
That was below GE's earlier estimate in regulatory filings that it would sell the shares for between $21 to $23 a share.
Genworth raised about $2.8 billion in its IPO, below earlier estimates of up to $3.3 billion. It was the first multibillion-dollar IPO in nearly two years to be priced below the low-end of its original filing range, according to Thomson Financial.
"I don't think it's got great upside," Frederic Burke, president of Johnston Lemon Asset Management Inc., told Reuters. "It's not a Google."
General Electric said in a statement it would use the proceeds to reduce debt at GE Capital. Genworth will not receive any of the proceeds from the offering.
GE sold a 30 percent stake in Genworth to public investors to reduce its exposure to financial services and focus on faster-growing businesses in a bid to reach its goal of double-digit profit growth in 2005, according to GE's annual report.
GE said it hopes to sell off more of Genworth in later offerings.
Genworth said it will file separate prospectuses to offer equity and preferred stock.
General Electric (GE: up $0.44 to $31.22, Research, Estimates) shares gained 1 percent in mid-afternoon trading on the NYSE.
-- from staff and wire reports
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