Could Groupon be offering Groupon for up to 50% off? This is a question investors and analysts are posing for Groupon’s upcoming IPO, scheduled for November 4th. What originally started as a speculated $25 billion offering has been reduced by more than half, even at the high end. With expected trading at around $16 to $18 per share, that’s only between $10.1 billion and $11.4 billion (only!). Analysts speculate that Groupon may be limiting the number of shares offered in order to entice investors to jump into the pool. Keep in mind, this valuation is still almost double the supposed $6 billion bid from Google less than a year ago. Also, keep in mind that the 30 million shares Groupon is offering represents just 5% of the company’s stock (5%!). Ironically, with all these big numbers flying around, Groupon has reported that it has lost money for the past three consecutive quarters. Huh?
If the Groupon IPO delivers the kind of investor enthusiasm that they are hoping for, other IPOs waiting in the pipeline will likely grow confident that the world is ready for new companies to enter the public market. If not, we may be in for a long, cold winter–and not just in the daily deal sector.