Chegg Inc. (NYSE: CHGG), an online textbook rental firm that also offers an online marketplace for textbooks, homework help and an array of other services for students, held its initial public offering (IPO) Wednesday morning. Shares were priced at $12.50, above the estimated range of $9.50 to $11.50, and the firm sold 15 million shares. Underwriters have an option on an additional 2.25 million shares.

The underwriters did their job perhaps too well on this one. Buyers of the IPO shares are not likely to be too happy about losing money so quickly. Shares opened trading at around $11.15 and have fallen as low as $10.31 in the first half hour of trading.

Of the shares offered in the IPO, 14.4 million are being sold by the company and the remainder by selling stockholder Aayush Phumbhra, who will retain a 2.3% stake in Chegg following the IPO. Phumbhra, a co-founder of the company, resigned as a director and an employee in May of this year.

Another big stakeholder in Chegg is GSV Capital Corp. (NASDAQ: GSVC), which claimed a $14 million investment in the company in early October. GSV also held a $37.6 million stake in Twitter Inc. (NYSE: TWTR) prior to its IPO and a $14.4 million stake in Violin Memory Inc. (NYSE: VMEM) prior to its IPO in late August.

Perhaps it is just coincidence, but an article on the high cost of textbooks published Wednesday noted that the CPI for college textbooks has risen by 144.45% since January 1998, compared with an overall CPI rise of 44.4%. But the bubble is beginning to deflate thanks to Chegg and other smaller and still privately held competitors to the large textbook publishers. College students — and their parents — may finally be getting a break.

Shares were down more than 14% shortly after 10 a.m., trading at $10.69.

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