NEW YORK (
) -- Newly minted shares of
Cobalt International Energy
tumbled in their debut on the
New York Stock Exchange
after the company's stock was priced below expectations.
Cobalt offered 63 million shares at $13.50 each, less than the $15 to $17 it had predicted. The deal raised $850.5 million, which could reach $978.1 million if underwriters exercise an option to purchase 9.45 million additional shares.
Shares of Cobalt fell by as much as 7% after the pricing, and are currently changing hands at $13.41.
The past week has been the most volatile for initial public offerings this year, according to
. Only four of the eight deals scheduled to hit the market have managed to price.
"We have been asked many times over the past few weeks what to make of the growing trend of failed deals," Bill Buhr, head of Morningstar's IPO research team, wrote in a note Wednesday. "We think it's part of a normally functioning IPO market, especially now that more companies are trying to raise funds."
Unsurprisingly, the first half of 2009 was slow for IPOs, with only 14 coming to market. The companies that did go public possessed "strong fundamentals in recession-resilient sectors," Buhr wrote. As a result, they were some of the
best performing new issues of 2009
"Now that the door has been thrown wide open, with firms all along the quality spectrum trying to raise funds, it should not surprise anyone that investor demand for some of these offerings would be weak to non-existant," Buhr wrote.