Reply #28: Groupon Takes Step Toward IPO

[ozymandius]

Groupon has been granted permission to raise $950 Million in equity financing through the sale of equity in the company.

From The Street:

According to a report from Reuters, Gropupon made a filing with the state of Delaware on Dec. 17 saying that it intended to sell equity stakes in the company for $31.59 each, valuing the company at between $6.4 billion and $7.8 billion.

Those equity stakes would automatically be converted into common share should the company go public at some point in the future.

I have conflicting thoughts about Groupon. It is a great concept that can generate repeat customers for local businesses. However, I know many small business owners who have participated in Groupon promotions and consistently lost money on the deal. According to my sources, the customer who uses a Groupon coupon is not very likely to return. The local restaurant listserv has been busy with harsh words and warnings about the pitfalls of Groupon promotions. This leaves me wondering if an IPO is premature given the shiny newness of the company.