Groupon to Finally Give Green Light to IPO
10/25/2011 by: Darleen Hartley
Groupon, the on-line discount coupon company, has given the green light to its IPO plan. Last June, a yellow caution light shone, and Groupon put on the brakes, hitting a red light, stopping its plans for an IPO in 2010. November 2011 looks like a go this time.
Analysts disagree on Groupon's chances of success. The company was an early entrant into the discount coupon game which gives it an edge, but more competitors could pop up. In this economy, however, few entrepreneurs are quick to enter the arena. On the other hand, first in doesn't always mean most enduring. Groupon will have to work hard to keep its edge.
For now, we can take advantage of so many enticing deals. Today's discounts show that 5 people bought a safari to Kenya that is regularly priced at $6,000. Groupon subscribers picked the trip up for only $3,600. Another 5 people bought liposuction coupons and saved $527 each. Less body image conscious individuals, 1,000 of them in fact, bought Big Spoon Yogurt treats at half price.
Even with vibrant activity, Groupon's value recently dropped, still the company is pegging its value at $11.4 billion and trying to raise $621 million. That's between $129 million and $379 million less than they had hoped for a year and a half ago. If you want in on this Groupon IPO deal, it will cost around $16-18 a share. Look for GRPN on Nasdaq.
Their S1 filing is amended to reflect a lower quarterly loss and 12 percent less money spent on marketing. Third quarter revenues were up $348.3 million from last year. Happily for the planned IPO, their subscriber base is growing each quarter. Of their subscribers, 25.9 million bought one of the coupons offered on the Groupon site.
A pinky swear is a promise to keep your word
As you can see in the video below, the company claims in its Groupon Promise that if Groupon ever falls short, they'll return your purchase.
The company is confidant you'll be satisfied based on the rules they use for choosing merchants that are featured on the website and by paying attention to the feedback from customers. Their Promise logo shows entwined pinkie fingers, the childhood symbol of swearing to keep your word. Let's hope their promise to investors of a good return on their IPO comes to fruition.
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