Groupon Inc raised $700 million after increasing the size of its initial public offering, becoming the largest IPO by an Internet company since Google Inc raised $1.7 billion in 2004.
Groupon’s has increased the shares to 35 million in total at a price of $20 each. The money raised is a meager 5 % of its valuation and this will support Groupon’s share price when it starts trading on NASDAQ.
The debut of the three-year-old company, which sells Internet coupons for everything from spa treatments to nose jobs, is one of this year's most closely watched.
Groupon faces a stiff competition from ‘biggies’ like Google and Amazon who are both working on clones of Groupon’s products. Google has been in talks with Groupon to acquire it for some $6 billion. The bid was rejected and Groupon is currently valued at $12.8 billion which is more than double of Google’s bid. Google’s Groupon clone is called ‘Offers’ and Facebook has also announced ‘Deals’. These are the biggest threats to Groupon because of the reach and popularity that Google and Facebook enjoy.
Skeptics are questioning the IPO and its future outcome and whether it would be wise to invest in a company whose business model is so shaky. The company’s ability to generate long term profit and revenue growth are also being scrutinized closely and doubts are beginning to crop. Many have advised people to stay away from the IPO because of its volatility. Groupon’s CEO, Andrew Mason and his team of executives have been on the road for almost 2 weeks talking and pitching to investors and allying fears about investing in the company.
Groupon is a company with market to 150 million consumers daily. No other company in the world has ever had that type of reach.
Wall Street will scrutinize Groupon's Friday showing for clues as to how other highly anticipated dotcom IPOs -- from the likes of Facebook or Zynga -- may fare in future.
Groupon’s has increased the shares to 35 million in total at a price of $20 each. The money raised is a meager 5 % of its valuation and this will support Groupon’s share price when it starts trading on NASDAQ.
The debut of the three-year-old company, which sells Internet coupons for everything from spa treatments to nose jobs, is one of this year's most closely watched.
Groupon faces a stiff competition from ‘biggies’ like Google and Amazon who are both working on clones of Groupon’s products. Google has been in talks with Groupon to acquire it for some $6 billion. The bid was rejected and Groupon is currently valued at $12.8 billion which is more than double of Google’s bid. Google’s Groupon clone is called ‘Offers’ and Facebook has also announced ‘Deals’. These are the biggest threats to Groupon because of the reach and popularity that Google and Facebook enjoy.
Skeptics are questioning the IPO and its future outcome and whether it would be wise to invest in a company whose business model is so shaky. The company’s ability to generate long term profit and revenue growth are also being scrutinized closely and doubts are beginning to crop. Many have advised people to stay away from the IPO because of its volatility. Groupon’s CEO, Andrew Mason and his team of executives have been on the road for almost 2 weeks talking and pitching to investors and allying fears about investing in the company.
Groupon is a company with market to 150 million consumers daily. No other company in the world has ever had that type of reach.
Wall Street will scrutinize Groupon's Friday showing for clues as to how other highly anticipated dotcom IPOs -- from the likes of Facebook or Zynga -- may fare in future.
The Indian Online Ecosystem is already showing signs of this news.....
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