All eyes on Groupon IPO
If all goes well, Groupon will finally price its IPO next week, aiming to sell 30 million shares at $16.00 to $18.00 each.
At the middle of that range, Groupon would emerge a company with a market cap of just over $11 billion. That's a humbling come-down from the $30 billion valuation it sought with its previous IPO attempt. The environment has shifted completely. The critics, especially merchants, have been anything but shy about the company's shortcoming.
The media has latched on with lots of articles that understandably question the long-term prospects of the company, especially when it comes to the much ballyhooed Groupon Now service. The company has touted the new service as central to its future as a technology company. By some accounts, the mobile service is falling flat.
"Groupon's first technology product Groupon Now appears to be a stinking dud, according to data released on Sunday. The Groupon Now mobile app chalking up some very dour numbers," according to VentureBeat, noting a study by Yipit that found that the new service has generated less than $1 million in net billings in the five months after it was launched.
As the roadshow gets underway, the underwriters may be feeling some nervousness. No banker wants to see such a high profile deal tank in the aftermarket. The big issue here is what the likes of Morgan Stanley and Goldman Sachs can do about it. Side deals to support the stock in the aftermarket are frowned on these days. They will likely be forced to actively support the stock themselves. They may be stuck with a dud issue. It happens. It will be really interesting to see what the analysts who work from these banks say when the initiate research.
Groupon IPO terms starkly different