Cowen Prices IPO Below Expectations

Cowen, the investment banking arm of France's Societe Generale, priced a $179.5 million initial public offering Wednesday night at $16 a share, according to published reports.

The firm, which first filed to go public in March, priced shares well below an expected range of $19 to $21, according to Dow Jones Newswires. The stock will begin trading Thursday under the symbol COWN.

Cowen's IPO, and first day of trading, will be closely watched by Wall Street as an indication of how the market is receiving investment banking shares. So far, analysts aren't encouraged.

"I am uncomfortable with how the Street is going to take to this offering," said David Menlow, president of IPOfinancial.com. "It is kind of the temperament litmus test."

After more than three years in a bull market, many boutique investment banks have been anxious to cash out at what could be the top of the equity market. Earlier this year, San Francisco-based Thomas Weisel (TWPG Quote) raised $90 million in an IPO. Shares in that offering were price at $15. The stock, which had traded as high as $23, is currently trading around $17.13.

In April, Ryan Beck, which is owned by BankAtlantic Bancorp(BBX Quote) filed for an IPO. Investment firm Evercore Partners also has filed for an upcoming IPO, and Keefe Bruyette & Woods said earlier this year it would try to come public this year.

Until recently, investment banks have thrived, driven by solid economic growth and strong merger and IPO action. Boutiques saw strong gains across the financial sector and believed their own public offerings could fetch good prices.

However, recently, some researchers have warned that boutique investment banks may not be as lucky in the coming months. Rising interest rates and slowing economic growth don't make a great environment for banks of any sort.