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Year's biggest IPO falls in debut
Shares of GE insurance subsidiary Genworth sink as much as 3.8 percent but then recover.
May 25, 2004: 4:06 PM EDT

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.

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"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.  Top of page


-- from staff and wire reports




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Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.