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Groupon selects its underwriters, play ball!

The group-buying giant is expected to choose Goldman Sachs and Morgan Stanley as its underwriters

Financial trends and news by Faith Merino
April 15, 2011
Short URL: http://vator.tv/n/1965

More Groupon IPO news! Aren’t you excited?!?!

The ever indefatigable Groupon IPO reports are now saying that Groupon has selected Goldman Sachs Group and Morgan Stanely as its two underwriters for a public offering valued between $15 and $20 billion. The Wall Street Journal cites sources close to the matter, who added that J.P. Morgan Chase will have a co-manager role for the IPO and at least two other banks are scrambling to be part of the action as well.

Groupon has not yet decided exactly how much it plans to raise from the IPO, sources say, but it could be as much as $1 billion. And when, pray tell, will this IPO happen? In the second half of this year, possibly in the third quarter, the sources report.

Groupon IPO rumors have run rampant since the company turned its nose up at Google $6 billion buyout offer, and in January reports bubbled to the surface that Groupon was in talks with Goldman Sachs and Morgan Stanley about a possible spring IPO valued at $15 billion. In March, rumor had it that that valuation had ballooned up to $25 billion. Yeah...that totally made me google "Andrew Mason girlfriend."

Groupon's crazy high valuations don't seem that far-fetched considering the fact that everything else about Groupon has grown at warp speed, from its subscriber base to its employee headcount. This time last year, Groupon had 200 employees and was operating in 45 markets. Today, the company has 6,000 employees and operates in more than 500 markets. Additionally, this time last year, the company was valued at $1.3 billion after it raised $135 million. So if Groupon does, indeed, go public at a valuation of $20 billion, its value will have increased more than 15x in one year.

Sadly, we will not see anymore crazy Groupon hyper-growth stories as the company has decided that it will no longer release growth numbers.

Nonetheless, the company has been experiencing some growing pains. In March, Groupon COO and President Rob Solomon announced that he would be stepping down after only one year on the job, explaining that the company has grown so much and so fast that it now requires a different kind of President, someone who can “take it to the next level.” Considering the fact that Groupon’s headcount grew from 200 to 6000 people in the year that Solomon was COO, who can blame the guy for deciding to bow out? By that point it’s essentially a different company altogether. As Solomon pointed out, that’s the kind of growth a company would typically see in five years, not one.

But Groupon isn’t slowing down at all. It’s looking for over 100 developers and technology specialists to join the team, and its tech strategy has already manifested in the brilliant Groupon Now app, a mobile app that helps users find nearby deals by the hour and their exact location. 


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