In their debut Thursday on the Nasdaq market, CDI shares lost 20.8 percent of their value, closing at
Nearly 3.1 million shares were traded under the symbol
What was surprising, said Seward, was that not only did the price drop in Thursday's trading but four of every five shares changed hands. "Basically, you have an entirely new set of shareholders that you didn't have this morning," Seward said. "Whoever bought into this (IPO) decided pretty quickly they weren't staying. It's pretty shocking."
He also said investment banks usually try to support a stock during the first 30 days of trading to avoid a big price drop.
"I would say they haven't clearly supported the stock. It's a little bit disappointing," said Seward, faculty director of the
CDI officials are not allowed to comment under terms of a quiet period surrounding an IPO.
Cellular Dynamics, founded in 2004, says it has 700 patents and uses proprietary stem cell technology to manufacture human cells, including heart and nerve cells, used for research, drug development and stem cell banks.
In its IPO filing, the company said it had
It is the first
Kauten said the first-day outcome could be a reflection of the volatility of the market and continued hesitation by some investors to taking risks.
"If you look at stem cells as a technology, there's still a belief that it will have a dramatic impact on us. But I think it's going to take some time before we see that dramatic impact," Kauten said.
Kauten said the IPO underwriters may have misread the market.
The IPO raised
Seward said he doesn't think
But such challenges as politicians who oppose the use of stem cells could be creating a "negative overtone," he added.
Seward said even though the early verdict is that investors are skeptical, the outcome for CDI could change over time.
"As a Madisonian, I would have hoped for a better outcome," he said. "I hope they could prove the markets wrong."
Kauten agreed. "Hopefully, it'll recover," he said. "Hopefully, we'll see people willing to take more and more risks as they get more and more comfortable with the wealth that they have."
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