Kara Swisher of All Things Digital reports
Groupon has priced its public offering at $20 a share, several dollars above the expected price range of $16 to $18. That will garner $700 million for the start-up, which is only several years old, at a valuation of close to $13 billion.
The offering for the Chicago-based daily deals site — which has had a controversial IPO process — was well upward of 10 times oversubscribed, meaning there was a lot more demand than supply of its stock.
To alleviate the difference, Groupon added five million more shares to its offering, totaling 35 million shares sold.
Based on the history leading up to this day which has been bizarre at times while seeming just plain slimy at others this will be one to watch. Not so much for the first day. Well, actually for the first day because those getting in at $20 based on the initial interest in the shares are likely to win big in a short time period by buying then selling the stock quickly. Many think this is a sucker bet because the long term viability of the company and the business model is still a large question mark.
How this looks six months from now will tell the tale of whether Groupon has been what it has claimed all along ( worthy of even a much higher valuation with talks at one point placing it at $30 billion) or whether it has indeed been just an elaborate Ponzi scheme that will create one of the most infamous business stories of recent memory.
Of note, LinkedIn, whose IPO was about 6 months ago is trading below the closing number after their first day of trading in May. It closed at $94.25 on its first day with its stock having been set at $45 per share. Yesterday it closed at $87.50. Over the six months it has been as low as around $65 per share according to Google Finance. Content farm monster Demand Media went public in January and saw its stock go up 33% on the first day trading as high as $25 per share. Yesterday’s close? $7.51 per share. While these companies are quite different from Groupon they are still part of the Valley IPO story of the past year.
Honestly, I have read almost too much about this “event” and am now content to sit back and see how it unfolds over time. I won’t be an investor so I am in it purely for the story. I hope there is a happy ending but I really hope it’s not just for those who are in the position to capitalize on the low price out of the gate then dumping it when there is sufficient profit made. I know that’s capitalism but sometimes capitalism can be so obvious in its “there are winners and losers” foundations. This time I fear that the losers may lose big.
What are your thoughts?