Orbitz Stock Falls Below Offering Price After Debut on Big Board
Shares of online travel agency Orbitz Worldwide fell 3 percent in their market debut Friday from a lowered initial offering price.
Orbitz was spun off from Travelport, which is part-owned by private equity firm BlackstoneGroup.
Blackstone's shares fell 4.3 percent to $26.16 after dropping to $26.05, their lowest point since the company's $4 billion initial public offering in June.
Orbitz's shares traded at a discount to the initial public offering price of $15 struck on Thursday. The company had expected to sell the stock at $16 to $18.
Travelport, which a Blackstone affiliate bought last year, said late on Thursday it had sold 34 million shares of Orbitz, representing a 40 percent stake in the company.
Orbitz said it would use the net proceeds of about $475 million, plus about $530 million in loans, to issue a dividend and repay debt to Travelport. Travelport will use that money to
pay down its own debt.
Orbitz, which owns Cheaptickets, ebookers.com, and HotelClub, competes with Expedia Inc. and Priceline for online travel bookings. The companies have their biggest footprint in the United States and are fast making inroads into European markets, where Internet penetration
The travel agencies are working to generate brand loyalty by beefing up services, focusing on customer service with such innovations as travel reviews and tips.