NEW YORK (AP) -- Not all Internet IPOs are created equal.
Shares of Chegg declined Wednesday in their first day on the New York Stock Exchange, offering proof that investors are selective in their affection for newly issued technology stocks.
Chegg Inc.'s shares, trading under the "CHGG" ticker symbol, dropped $2.82, or 23 percent, to close Wednesday's trading session at $9.68.
The Santa Clara, Calif.-based company, which provides online textbook rentals primarily to college students and other education services, said the initial public offering of 15 million shares priced at $12.50 per share. That was above the projected price range of $9.50 to $11.50 per share.
Chegg raised approximately $187.5 million in the transaction.
Investors may have been concerned with Chegg's lack of profits. According to the company's IPO paperwork, Chegg has "experienced significant net losses" since its incorporation in July 2005. The company lost $37.6 million in 2011, $49 million in 2012, and bled $21.2 million in the first six months of this year. Although its annual revenue has consistently grown —to $213 million in 2012, Chegg told said in its IPO filing that it couldn't assure investors that it will be profitable anytime soon.
Chegg's Wall Street debut comes just days after another unprofitable Internet company —Twitter— raised more than $1.8 billion in a successful IPO that values the company at roughly $29 billion.
Chegg offered 14.4 million shares as part of its IPO and a selling stockholder offered 600,000 shares. Chegg won't receive any proceeds from shares sold by the selling stockholder.
The IPO's underwriters have a 30-day option to buy up to an additional 2.3 million shares to cover any excess demand.