October 25, 2011 by staff
GROUPON IPO, Groupon Inc plans to raise up to 540 million in an initial public offering, less than expected, as the daily deals website faces a weak stock market, executive departures, and questions about its accounting and business model.
The company expects to sell 30 million shares, or less than 5 percent of the company between 16 and 18 and each, according to a regulatory filing Friday.
The midpoint would Groupon value and 10.8 billion, far less than the 20 billion and was expected initially, but still above the 6000 million and Google Inc offered to pay for the business last year.
Despite the low valuation, someanlysts say that the actions of Groupon could still have problems when it’s released in November. They point to questions about long-term viability of a company faces fierce competition in a business that has low barriers to entry.
The fact that Groupon has changed its accounting twice under pressure from regulators, and the loss of two operations officers this year, has not instilled confidence.
“This offer seems very, very attractive,” said Josef Schuster, founder of IPO research based in Chicago and Schuster iPox investment house. “I think it’s overvalued.”
He said that with the gradual reduction of the IPO and the suggested small float more shares could be downloaded later. According to the lawsuit, the initial public offering and raise between 480 million and 540 million, compared with a previous target of up to + 750 million.
Supply industry on the Internet every day has exploded into a billion dollar business from Groupon was released in late 2008. That growth has attracted hundreds of competitors, including giants like Google and Amazon.com Inc.
Brad Gastwirth, co-founder of the investment strategy ABR, an independent research firm focusing on technology and health, said the low appraisal will help the IPO, but have expressed concern about whether Groupon can diversify their income sources and switching to higher margin products.
“There was interest from investors very little agreement on the valuation and 20 more than a billion,”said Gastwirth.” While on the surface of multiple prices and sales is becoming more reasonable, there are still many questions that need answering and before investors feel comfortable with this IPO.”
Groupon is one of the most closely watched IPO this year, as financial market turmoil disrupted many plans stock offering and reduce the value of the few who do it. If Groupon is successful, it will bode well for other companies also are considering going public, including the social gaming company Zynga and Facebook.
“The market is slowly reopening,”said the head of Bob McCooey NASDAQ lists.” Companies like Groupon have been to wait and see mode for quite some time and are now seeing an opportunity to go out and get a price, and are taking advantage of that.”
The shares are expected to trade on Nasdaq under the symbol “grpn.”
Groupon is preparing to launch next week on tour with Andrew Mason CEO, CFO child Jason and Jeff Holden overhead product to attract potential investors.
A major question marks about Groupon has been whether the company can be profitable soon. IPO Filing released Friday for the third quarter results and some progress on profitability.
On a pro forma operating basis, excluding stock-based compensation, loss of Groupon and declined to 2 million in the third quarter and 62 million in the second quarter, partly because it keeps a lid on marketing costs. Earlier this year, Richard Williams was hired Amazon to marketing of the head.
The company said it had 30 million customers at the end of September, up from 23 million three months ago. Customers are subscribers who have purchased one of Groupon coupons.
Repeat customers increased to 16 million in the third quarter of 12 million late in the second quarter, the company also said in his presentation.
The average number of coupons sold per customer was 4.2, up 5 percent over the past three months.
Morgan Stanley, Goldman Sachs & Co and Credit Suisse are the main underwriters of the offering.
Please feel free to send if you have any questions regarding this post , you can contact on
Disclaimer: The views expressed on this site are that of the authors and not necessarily that of U.S.S.POST.