The initial public offering of The Cobalt Group (Nasdaq: CBLT, which helps automobile dealers build their Web sites, was disappointing before it even started trading on Thursday. The IPO was priced at $11, down from an original price range of $13 to $15. Things got worse for the stock on Thursday, when it fell 2-11/16 to 8-5/16, a loss of more than 24 percent.
Earlier this year, when the Internet IPO market was extremely overheated, even the most questionable Internet IPOs saw pops in their first day of trading. The last few months have seen investors become more selective, and now the entire nature of the market has changed.
There’s no longer any guarantee of first-day gains for well-known companies, and it looks like lesser-known companies like The Cobalt Group are going to continue having the toughest of times on opening day.