Shares of RailAmerica Inc. made their public trading debut on Wall Street Tuesday, but the initial public offering failed to draw the anticipated support that would suggest stronger industry economic performance ahead.
Jacksonville, Fla.-based Rail America, which operates 40 North American short line and regional railroads, set a price of $15 a share late Monday in offering of 22 million of its shares. The offering price itself was below the company’s estimate last week that the shares would fetch $16 to $18 a share.
Shares fell further in first-day trading Tuesday, down $1.25, to close at $13.75. Shares rallied Wednesday, however, closing up almost 5.9% at $14.56, mimicking the advance of other U.S. rail company stocks.
RailAmerica’s revenue was down 19% during the first half of 2009, though the company did raise its operating income by 10% during the period due to cost-cutting.
The company made its public trading debut on the New York Stock Exchange 2½ years after being acquired by New York-based Fortress Investment Group LLC, a private-equity firm.