Groupon's IPO raises $700 million
Groupon's Nov. 4 initial public offering (IPO) raised $700 million, the largest IPO by an Internet company since Google's 2004 IPO generated $1.7 billion. The IPO, which took more than five months to complete due to accounting metric discrepancies, brings the daily deals company's valuation to roughly $12.7 billion.The stock priced at $20 and shares opened at $28, before reaching $30 a few minutes after trading started. The company issued 35 million shares, which equals approximately 5% of the total company. Several financial media outlets estimate the company's value to be close to $18 billion, or roughly three times Google's $6 billion acquisition offer.
Groupon filed for a $750 million IPO in June. The IPO was delayed in September due to “market volatility,” according to an unnamed source. This same source told The Wall Street Journal that the U.S. Securities and Exchange Commission contacted a Groupon attorney with questions about a leaked memo written by Groupon CEO Andrew Mason in which the executive may have made public statements about the company's financial status before the IPO.
The Chicago-based company most recently submitted a regulatory filing on Oct. 7 that said the company would significantly reduce online marketing spending.
In the past 12 months, the company suffered several setbacks, namely COO Margo Georgiadis leaving her post after five months to return to her former employer Google; Rob Solomon, president and COO stepping down after about one year at the company; and a series of Super Bowl ads the company pulled in response to criticism.