03. June 2011
Groupon.com is a famous website which is known for its deal of the day trading platform since its inception in early 2008, by young businessman Andrew Mason. But it seems that Groupon is one of the most unpredictable businesses as it reportedly offered a buyout deal from Google, in September last year, which would make the company and the founders worth billions of US dollars, however oddly enough Groupon turned it down for reasons still not made public. But Groupon is surely looking for some change in its growth strategies and business model as a spokesman announced on Thursday May 2nd that the company is looking forward to file an initial public offering as soon as possible.
Groupon is already commenced with the process of filing the required documents with the securities and exchange commission though the date of the IPO is not exactly fixed. The company plans to raise around $750 million from selling its public float and is going to trade under the ticker symbol of GRPN. Even though the company did not mention whether it was going to be listed on which stock exchange, it said that prominent investment banks like Goldman Sachs and Morgan Stanley will work as under writers for it, It also revealed that it had made a pretax gross profit of $645 million in the first quarter this year but it also suffered a loss of $114 million this year and $200 million in the fourth quarter last year as well.
Even though Groupon may still manage to keep a reasonable price to earnings ration, some analysts feel that this IPO may be the reminiscent of the Linkedin IPO of last month, which was compared to the growth of the dot com bubble. The Linkedin IPO made its founder an overnight billionaire and made the company worth around $10 billion, which was a an astounding sum compared to the net earning of the company being only 3 million dollars last year. This sudden valuation of Linkedin was similar to all the internet companies that had existed in the Dot com bubble era. But all of us can only hope that Groupon and even Linkedin do not end up being volatile market bubbles, because it they pop, the global economy will start losing billions of dollars.