3 IPO Issues Debut to Mixed Reactions

The year’s biggest initial public stock offering got a friendly reception from Wall Street on Wednesday, but two smaller deals had a rough day -- a reminder that investors are treading carefully in the revived IPO market.

China Life Insurance Co., China’s largest life insurer, made its debut on the New York Stock Exchange and rocketed 27% from its IPO price of $18.68 a share to $23.72, up $5.04 for the day.

The company’s initial stock sale raised $3 billion worldwide, making it the biggest IPO this year. Each NYSE-traded share represents 40 Hong Kong shares. The Hong Kong-listed issue began trading today.

The Beijing-based company was created this year as part of a restructuring of a state-owned enterprise. Demand for the shares was massive worldwide as investors clamored for a piece of the fast-growing Chinese economy, analysts said. China Life has 45% of the nation’s life insurance market.

“China seems to be on everyone’s list because of all the economic activity,” said Ted Weisberg, an NYSE floor trader for Seaport Securities. “The success of their IPO is a reflection of that.”

The IPO of online travel company Orbitz Inc. also was a big success Wednesday -- for a while. The shares rose from their IPO price of $26 to as high as $30.75 on Nasdaq in early trading. But sellers then slammed the stock, and it closed at $24.98, down $1.02 from the IPO price.

David Menlow, head of research firm IPOFinancial.com, said Orbitz’s plunge might have reflected professional investors’ surprise at how well the stock performed at the start of trading and their fear that the appetite might quickly ebb as Wall Street empties out for the Christmas and New Year’s holiday weeks.

He also noted that the company’s underwriters had been aggressive in pricing the deal. The stock was expected to be priced at $22 to $24 a share, but underwriters brought the deal out at $26 because of demand.

Orbitz is owned by the five biggest U.S. airlines, which retained about a 70% stake in the company.

Another dot-com deal also struggled Wednesday. San Diego-based Provide Commerce Inc., which operates an online marketplace for perishable goods such as flowers, meat and fruit, was priced at $15 in its IPO, then fell $2 to close at $13 on Nasdaq.

Investors’ interest in IPOs has rebounded in recent months, and many of the shares have posted strong gains on their first trading days. But the stocks’ performances overall have been much more restrained than at the height of the dot-com boom in 1999.

One recent exception: Ctrip.com International Ltd., a Chinese online travel firm. It jumped from $18 to $33.94 on Nasdaq on its first trading day last week and by Friday was at $39.29. It had fallen back to $32.05 as of Wednesday.

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Mixed bag

Here’s a look at some of the initial public stock offerings of the last two weeks and how each fared on its first trading day.

*--* First-day close Stock and change Ctrip.com $33.94, +$15.94 Intl. Steel 35.20, +7.20 Universal Technical 26.35, +5.85 China Life 23.72, +5.04 Central Freight 17.35, +2.35 Nelnet 21.80, +0.80 Utd. National 17.50, +0.50 NPTest 12.00, -0.51 Orbitz 24.98, -1.02 Provide Commerce 13.00, -2.00

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Sources: Bloomberg News, IPOHome.com