Groupon's IPO back on track for Oct/Nov?

Faith Merino · September 15, 2011 · Short URL:

Reports indicate Groupon is planning to go ahead with its IPO this fall

Groupon may be down, but it’s not out.  After reports surfaced last week pointing to Groupon’s IPO hesitation in light of the recent market fluctuations, sources are now telling the New York Times that Groupon is planning on going forward with its IPO in late October or early November.

Originally, Groupon had been planning on going public after labor day, according to sources who spoke with the Wall Street Journal.  But stock market volatility persuaded the company to delay its IPO, as well as its investor road show, which was scheduled to kick off this week.

While Groupon is tentatively planning for a late October/early November IPO, another capsize in the stock market may prompt another delay, according to the Times’ sources.

Groupon isn’t the only company to get jumpy over the somersaulting market.  More companies pulled their IPOs in August than any other month in the last ten years.  Fifteen companies decided to call off or postpone their IPOs last month, according to Dealogic.  By comparison, the last time we saw a mass exodus of this nature was April 2001, when 20 companies pulled their IPOs.

It doesn’t help that Groupon has amassed a collection of critics who haven’t been shy about calling out the company on its flaws. 

And the headlines have been dismal.  There was Yipit’s recent report that Groupon’s oldest markets are declining as Groupons fail to sell despite an increase in subscribers, which could point to a lack of long-term stability.  And then there was the recent Harvard/Boston University study that found that merchants who run a Groupon deal see an overall 12% decline in their Yelp rating, knocking them down by half a star out of Yelp’s five-star rating system.

Even worse, Groupon continues to hemorrhage money.  Its second quarter earnings were something of a mixed bag.  On the one hand, it was another quarter of explosive revenue as Groupon raked in $878 million in the second quarter, up from $644 in the first quarter, for a total of more than $1.5 billion for the first half of the year—which means that Groupon is well on its way to making at least $3 billion in revenue in 2011.  By comparison, Groupon made $713 million in revenue for the entire year of 2010.

But on the other hand, Groupon lost another $103 million—after losing $102 million in the first quarter.

If Groupon does, indeed, decide to go ahead with a late October/early November IPO, it may be scheduling its investor road show for the middle of next month, according to the New York Times. 


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