Groupon reportedly sets share prices at $20

Groupon reportedly sets share prices at $20

Summary: Groupon is on the eve of going public, but its financial figures are getting fatter and more overblown than ever.

SHARE:

Groupon is set to go public on Friday, but its share prices are going to be more expensive than expected.

AllThingsD's Kara Swisher reported on Thursday afternoon that the Chicago-based company is planning to start sell shares at $20 a pop. Furthermore, Groupon is supposedly oversubscribed, so the daily deal giant is padding on five million more shares to meet demand for its stock.

All of that taken together is significantly higher than original number of 30 million shares up for sale reported earlier today, priced between $16 and $18 a piece. Under that model, Groupon would be valued between $10.1 and $11.4 billion.

This last minute update is a bit extreme and could give investors and analysts a shake. But considering the flurry around Groupon during the last few months since the daily deal giant declared its IPO in June with the intention to raise $750 million, this just falls in line with Groupon's reputation now.

Controversies have included reports about unusual accounting schemescosting business owners more money than they receive in return, and major drops in traffic in comparison to major competitor LivingSocial. Groupon was supposedly even bleeding money itself.

All of this taken together has given rise to the theory that Groupon could be for daily deals what MySpace has become for social networks, which isn’t a very favorable comparison if you’re at all familiar with the latter.

Several other major startups, such as Kayak and Evernote, that have made it big in the last few years and declared IPOs have evidently learned by example and have held back from rushing to go public.

Nevertheless, Groupon finally set an IPO date in October for Friday, November 4. So tomorrow morning, Groupon will start appearing on the Nasdaq exchange under the symbol, "GRPN."

Related:

Topics: Start-Ups, Google, IT Employment

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Talkback

3 comments
Log in or register to join the discussion
  • RE: Groupon reportedly sets share prices at $20

    I'm frankly amazed at this valuation; certainly in the UK, Groupon has already peaked, and is in a highly competitive niche with small margins. The offers they send out are mostly the sad 'cheapo stay in an underbooked hotel', as touted by scores of competitors - I wouldn't invest a penny in any of these 'special offer' companies.
    Heenan73
  • RE: Groupon reportedly sets share prices at $20

    I haven't seen something like this since right before the dot-com bubble burst in the 90s (when one company wanted to go public with no completed product, no revenue stream, and had never actually made a penny since its inception, yet wanted to offer billions in stock and make its founder an instant billionaire). This is something people should consider selling short immediately, which is the only way they're going to make money on this stock.
    jgm@...
  • RE: Groupon reportedly sets share prices at $20

    Another opportunity for the investment community to do a pump and dump. As has been pointed out in several blogs, Groupon is little more than an electronic "penny saver" or coupon mailing. Groupon is not doing anything innovative. It's not a technology company. It's not the end all solution for advertisers. It is a 90s style dot-bust company.
    7mgte