(Reuters) – Shares of Chegg Inc, whose main business is renting textbooks, fell as much as 18 percent in their debut on Wednesday, a day after its initial public offering was priced above the planned range.
Chegg’s IPO of 15 million shares was priced at $12.50 each, higher than the expected range of $9.50-$11.50.
The shares opened at $11.00 on the New York Stock Exchange, 12 percent below their IPO price. They fell to a low of $10.30 in heavy trading.
Chegg, whose name is derived from the chicken-and-egg conundrum, would have been valued at more than $1 billion at its IPO price.
The company rents textbooks from its library of nearly 180,000 titles, sourced from publishers including Pearson, McGraw Hill, Wiley and MacMillan.
Santa Clara, California-based Chegg was co-founded by Aayush Phumbhra while he was studying at Iowa State University.
Under CEO Dan Rosensweig, a former executive at Yahoo Inc , Chegg has built an online platform for homework note-sharing, class planning, finding professors and tutors, and even recruiting for athletics.
Launched nationally in 2007, Chegg has raised more than $200 million in venture funding and debt. Its investors include Insight Venture Partners, Foundation Capital, Gabriel Venture Partners and Kleiner Perkins Caufield & Byers.
JP Morgan and Merrill Lynch, Pierce, Fenner & Smith were the lead underwriters of the offering.