Assuming that Groupon can resolve its SEC issues:
Lower valuation for Groupon IPO might not be so bad $5 billion could have been lost due to the controversy surrounding the daily deal site's planned initial public offering
Melissa Harris' Chicago Confidential
Chicago Tribune
September 4, 2011
Shares of daily deals website Groupon recently traded at an implied valuation of $14.9 billion on SharesPost, a secondary market for equity in private companies.
Sites like SharesPost and SecondMarket allow employees and other shareholders to unload their holdings while a company is still private. That could be an enticing option for some owners of Groupon shares, given the uncertainty about how the company's planned initial public offering will be valued. Critics have tried to poke holes at the staying power of the Chicago company's business model, which led CEO Andrew Mason last week to write a memo — quickly leaked — in which he labeled the skepticism "insane" and "hilarious." The memo in turn raised questions about whether Mason violated federal "quiet period" rules connected to impending IPOs.
A $14.9 billion valuation would be a lot less than the $20 billion to $30 billion estimates heard in the days following its June announcement that an IPO is coming. It also suggests that the beating the company has been taking in the financial press, as well as fallout from the memo, is affecting investors.
But in the long run, a lower valuation may not be so bad, some tech insiders have told me. It lessens the chance of Groupon's stock coming out with a bang, only to crater (and thus take a further public relations beating). It also likely is a more reasonable snapshot of what the company is worth, while still outstripping the $6 billion Google reportedly offered for the company less than a year ago.
Mason and company Chairman Eric Lefkofsky, who are the decision-makers, already are plenty rich. They unloaded a large amount of shares months ago.
<snip>
chicagotribune.com |
