Major domestic Internet service provider Nifty Corp. made a lackluster debut Thursday on the second section of the Tokyo Stock Exchange, ending its first day of trading at 203,000 yen, down 3.33 percent from its initial public offering price of 210,000 yen.
After fetching a first quotation of 206,000 yen, the stock briefly shot past the IPO price to hit the day's high of 223,000 yen before losing steam in late trading.
"It ended lower because the number of shares offered in the IPO was too big," said Kenichi Azuma, equity strategist at Cosmo Securities Co.
Nifty offered 27,800 new shares and 52,100 of its outstanding shares for the IPO. Based on the closing price, the stock has a market capitalization of 16.22 billion yen.
Although the company has a well-recognized name, Nifty shares failed to attract investors because competition in the Internet access business is severe, Azuma said.
"Also, Nifty debuted when the market was performing rather weakly," he said, adding that the cash flow on the market has recently been low and investors had no extra money to spend on IPOs.
By going public, the company, a unit of electronics firm Fujitsu Ltd., intends to enhance its value and corporate independence to make it easier to raise funds, Nifty officials have said.