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Hot on the heels of the successful LinkedIn IPO, Groupon has filed its S-1 paperwork with the government to have a public offering of its own. The online purveyor of deals is looking to raise $750 million. Can Groupon’s 83 million subscribers get it the cash it needs? Its profits certainly won’t.
As part of the IPO process, a company has to lay out their financial so potential investors can see what they’re getting into. Groupon actually lost $456 million last year, and then went on to lose a further $146 million in the first quarter of 2011. CEO Andrew Mason added a personal letter to the press release to explain why he thinks Groupon is a good investment.
The company has been investing heavily in acquiring new users, Mason said. It's about the long game for him. He continued more generally saying, “We don’t measure ourselves in conventional ways.” But will the market see it that way? Still, their user base is large, and a fair chunk of users have actually bought a Groupon deal. How do you think this will pan out?
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JohnsonSmith
June 28, 2011 at 5:04am
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yu119995
June 03, 2011 at 8:30pm
It's a failing model really. There have been nothing but complaints regarding the service overall. Merchants are using the service with the hope of bringing on new customers; retention if you will. They're doing this at a loss. The majority of those patrons using those offers are comparable to sweepers or professional sweepstakes players. They simply go where the offers are. They're mercenaries and why shouldn't they be. They're getting 50-60% off everyday services. I know I would. There's a reason why Groupon isn't turning a profit.
tony2tonez
June 02, 2011 at 9:22pm
i should have bought on Linkedin IPO. Most shark investors will do the same on Groupon as will I. I will buy on the first day and sell on the second. Even if you bought Linkedin the first day and stuck with you are still up $30/share. If this is another dot com boom and bust might as well join it buy and sell quick. I will look into see where this prices. Buying and holding is rather risky for dot coms again but some of them are different this time around as social media is bigger and actually has consumers as to what it was the first time around.
lindethier
June 02, 2011 at 11:25pm
Yeah, I think they are gonna have a hell of a time turning a profit at this point. Definately should have gone with Google.
Brad Chacos
June 02, 2011 at 5:04pm
Google: "We like you. How about $6 billion?"
Groupon: "Nah, we'd rather lose half a billion this year."
Huh? If they've already lost $140m in the 1st quarter, they're on pace to lose half a billion again this year. I would have taken that $6b check and ran out the friggin' door. Then again, if I ever saw a $6b check I'd snatch it and run out the door, even if it didn't have my name on it.
bloodgain
June 03, 2011 at 9:43am
I wonder if Google will come back this time and offer them $2 billion instead?
I wouldn't touch the IPO of a company that's hemmorrhaging money like that unless I knew something the rest of the world didn't (of course, then I'd probably go to jail for insider trading). They better hope Google has an idea and still wants in.
