Groupon Raises $700 Million After Increasing Size of IPO
November 4, 2011 11:06 AM
comment(s) - last by
Groupon's IPO is the largest for an Internet company since Google in 2004, which raised $1.7 billion
Back in September, Groupon delayed its initial public offering
due to SEC questioning
and the dismal outlook of developed economies' stock markets. Now, Groupon has raised $700 million after increasing its IPO size to become the largest for an internet company since Google in 2004.
Deal-of-the-day website Groupon increased the size of its IPO by 5 million shares to 35 million total, with each priced at $20 when they were originally around $16 to $18. Groupon is now valued at about $12.8 billion.
Groupon's public float represents just over 5 percent of the company, and has helped increase price and demand. According to analysts, it will also support Groupon's share price Friday when it starts trading under GRPN on the NASDAQ.
However, some worry that Groupon will need to spend more in order to drive subscriber growth, and won't be able to compete with larger players like Amazon and Google. In addition, there are accounting-related concerns due to Groupon's altering of its IPO filings in order to "change the way it accounted for revenue."
Groupon CEO Andrew Mason and his team spent nearly two weeks on the road meeting with investors to address such issues. The long term is a concern for most in regards to growth and revenue.
"The post-IPO investor will be taking a risk on this deal," said Josef Schuster, founder of IPO research and investment house IPOX Schuster. "It's maybe a good trade for a day trader, in and out in a single day, but I don't want to be in it for the long run."
, Groupon cut its valuation by nearly half to make the deal.
If underwriters ended up buying just over 5 million more Groupon shares in the IPO, the company will raise more than $800 million.
"[Groupon] is a company with permission to market to 150 million consumers daily," said Boyan Josic, chief executive at Daily Deal Media. "No other company in the world has ever had that type of reach. Investors who truly understand this business model and the position that Groupon has in this market are buying."
Groupon, which fell under SEC questioning due to an internal memo sent by Mason in August that "lashed out" at company critics and discussed August revenue growth before the planned IPO, is asking more than twice what
offered to pay in order to buy the company last year with its $12.8 billion price tag now.
Groupon's IPO could set a trend for others, such as Zynga, which filed an IPO in June and is expected to start trading this month.
This article is over a month old, voting and posting comments is disabled
Groupon has a license to spam.
11/6/2011 4:49:09 PM
If you think about it, that's all that Groupon really is - a spammer who doesn't need to worry about being blacklisted. They're basically getting custom "affiliate offers" from businesses which they then plug on their website but primarily via email. They don't even send you a validation link to confirm that the email you enter is legit, nor do they use captcha, so it is possible that someone could sign up with a bunch of "spam trap" emails and get them shut down...or at least put a dent in their operations.
"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan
Google Offers Failing to Compete with Groupon, LivingSocial
September 13, 2011, 11:25 AM
Groupon Delays IPO Due to SEC Questioning
September 7, 2011, 11:18 AM
Twitter Senior VP: "Diversity is Important, But We Can’t Lower the Bar"
November 9, 2015, 9:59 AM
CNN Resorts to Internet Censorship to Promote Clinton Over Senator Sanders
October 15, 2015, 2:47 PM
Breaking Bad: How to Crash Google's Chrome Browser With Just 8 Characters
September 23, 2015, 11:08 AM
Quick Note: Amazon UK Offers £10 Back on Any Order £50 or Over
August 3, 2015, 12:05 PM
Editorial: Reddit Allows Itself to be Hijacked as a Hate Platform For Racist Bigots
July 21, 2015, 6:32 PM
Mozilla and Facebook to Adobe: It's Time to Kill Flash
July 20, 2015, 6:30 PM
Latest Blog Posts
Sceptre Airs 27", 120 Hz. 1080p Monitor/HDTV w/ 5 ms Response Time for $220
Dec 3, 2014, 10:32 PM
Costco Gives Employees Thanksgiving Off; Wal-Mart Leads "Black Thursday" Charge
Oct 29, 2014, 9:57 PM
"Bear Selfies" Fad Could Turn Deadly, Warn Nevada Wildlife Officials
Oct 28, 2014, 12:00 PM
The Surface Mini That Was Never Released Gets "Hands On" Treatment
Sep 26, 2014, 8:22 AM
ISIS Imposes Ban on Teaching Evolution in Iraq
Sep 17, 2014, 5:22 PM
More Blog Posts
Copyright 2016 DailyTech LLC. -
Terms, Conditions & Privacy Information