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Shares of Genworth Financial Inc. ended their first trading session unchanged yesterday, one day after the initial public offering of the life and mortgage insurer's stock failed to generate enough interest to meet its expected sale price.

Shares of Genworth, which was spun off from General Electric Co. in the biggest IPO this year Monday, fell as much as 3.8 per cent to $18.75 (U.S.) in the opening minutes of its debut on the New York Stock Exchange before ending the session at $19.50, unchanged from its sale price. Almost 40 million shares traded.

"The perception is that GE is bailing out of a unit that they believe is not going to be consistent with their growth projections. That is a euphemism for: 'We have a problem here and we better get rid of it before it negatively impacts our bottom line,' " David Menlow, president of IPOfinancial.com in Millburn, N.J., said of the lacklustre offering.

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Investors bought 145 million class A Genworth shares at $19.50 each on Monday, falling short of GE's expected sale price of between $21 to $23 a share.

Genworth, based in Richmond, Va., raised another $700-million through the sale of additional equity units and preferred shares. The IPO raised gross proceeds of about $2.83-billion for GE.

Genworth's spinoff from GE has generated less buzz than on-line search company Google Inc., which expects to sell $2.72-billion worth of shares to the public later this year.

Fairfield, Conn.-based GE, a conglomerate whose businesses range from commercial and consumer financing to light bulbs, sold 30 per cent of Genworth, with Morgan Stanley and Goldman Sachs acting as underwriters. GE said it plans to reduce its 70-per-cent stake as soon as it is practical, most likely through secondary stock offerings.

Genworth is profitable. The company said first-quarter profit rose 11 per cent to $266-million compared with the year-earlier period, according to filings with the U.S. Securities and Exchange Commission. Sales climbed 8.5 per cent to $2.55-billion compared with the first quarter of 2003.

"The business that they are in, which is long-term health care and mortgage insurance, are two very susceptible industries right now," Mr. Menlow said, noting that looming higher interest rates will dampen the mortgage market.

The spinoff is part of GE's strategy of focusing on businesses with higher growth rates.

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"It's great to see that even in this tough market we have been able to launch an IPO that ranks as one of the largest ever," said Jeffrey Immelt, GE chairman and chief executive officer, in a news release.

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