Pepsi Bottling Group Inc. shares began trading on the New York Stock Exchange on Wednesday but the debut was spoiled by bad news from the soft drink industry leader Coca-Cola Co.
After the biggest initial public stock offering so far this year, shares of Pepsi Bottling closed at $21.69, down $1.31 from the IPO price.
Analysts said the debut was hurt by Coke's forecast on Monday that its worldwide sales will be down in the first quarter.
"Wall Street wants to embrace these well-known larger companies, but the timing couldn't have been worse," said David Menlow at IPO Financial Network in Millburn, N.J.
Pepsi Bottling, PepsiCo Inc.'s primary bottler, raised $2.3 billion in the IPO late Tuesday, pricing 100 million shares at the low end of the expected range of $23 to $26 per share.
The lead manager of the offering was Merrill Lynch & Co.
"Shares priced at the lower end of the range. . . . Merrill Lynch was very cautious about the deal," Menlow said.
Pepsi Bottling has said it will use the proceeds to pay off part of its debt, but its debt will still amount to about $3.3 billion.