Groupon IPO on hold
reuters.com
Groupon IPO on hold
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Re: Groupon IPO on hold
#2probably a good idea for groupon. though i enjoy bagging on Groupon's highly unconventional approach to wall street bankers in preparation for its IPO, seven years ago Google was in the same position [1]. Google exhibited hubris and showed no clear purpose for the proposed raised equity, ultimately IPOing shortly after the peak of its 'hotness'. That is not to suggest that Google's business is comparable to Groupon's, but that anything could happen. Google may have not IPO'd like a pro, but they are one of the largest shakers in the tech industry today.
[1] http://www.washingtonpost.com/ac2/wp-dyn/A14939-2004Aug19?la...
Re: Groupon IPO on hold
#3The research I'm following [1] (and probably over simplifying here) indicates that the double dip in the stockmarkets will really kick off this month (Sept 2011) for at least 6 months.
Maybe Groupon thought they could sneak in ahead of that; maybe they thought the economy wouldn't double dip; maybe they thought there was enough positive momentum in the idea of Groupon that external factors wouldn't matter.
But the scary thing is that if they've heavily cut back on marketing AND they're low on cash as other reports have indicated, then they won't be able to postpone the IPO through until March 2012. They may be forced to list as the market tumbles or, best case scenario, at the bottom of the next bull run. Not ideal timing unless your definition of ideal involves "buy high, sell low".
[1] See all the economic articles by Darren Shirlaw here http://www.shirlawsonline.com/editorials . (Disclaimer: I'm completely biased because the companies I own are licensed through the company Darren founded, so part of everything I bill goes to his research and development team (and I've been part of that team for specific projects, including currently reviewing his articles and predictions from the past 4 years for a short book on navigating through it all).)
Re: Groupon IPO on hold
#4It would probably be best for the whole segment if it got cancelled entirely. There are way too many questions about the long term viability of groupon to feel good about an IPO, as well as a possible SEC probe.
see also:
Re: Groupon IPO on hold
#5The research I'm following [1] (and probably over simplifying here) indicates that the double dip in the stockmarkets will really kick off this month (Sept 2011) for at least 6 months. Maybe Groupon thought they could sneak in ahead of that; maybe they thought the economy wouldn't double dip; maybe they thought there was enough positive momentum in the idea of Groupon that external factors wouldn't matter. But the sc…
... I think it's much more likely they didn't foresee the negative reaction that their IPO filing created. The buzz is bad, therefore they will try and refocus and won't do an IPO right now.
Re: Groupon IPO on hold
#6A theory: Groupon leaked the memo so that it would be forced to pull the IPO, similar to Wired in 1996.
Re: Groupon IPO on hold
#7If they don't IPO, how long until they run out of cash on their current trajectory? I seem to remember the runway was surprisingly short (something like this or next quarter), in part because of using fundraising to give cash to early investors and insiders.
Re: Groupon IPO on hold
#8A theory: Groupon leaked the memo so that it would be forced to pull the IPO, similar to Wired in 1996.
And leave the G round investors, who put in $950 million in January (http://www.businesswire.com/news/home/20110110006746/en/CORR...), holding the bag?
It doesn't seem like something they'd do deliberately.
Re: Groupon IPO on hold
#9I though that they were going to successfully IPO around the previous valuations.
It's just been a supremely turbulent/volatile this summer and eyes have shifted to Tech IPOs commonly during downslopes. People have been considering if Tech IPOs are over-valued - not forgetting what happened just a couple years ago.
My blog on the credibility of Groupon's IPO Valuation maybe wasn't so spot on. Granted, I voiced my thoughts on the IPO's validity much before the coaster ride investors have been on this summer. Blog from (6/18/11): http://jacobirw.wordpress.com/2011/06/18/groupon-pre-ipo-val...
Despite the consensus on Groupon's overall unworthiness at this time, with new management (or a pivot under current) the Groupon IPO could be right back in the positive light of investors and the tech community alike. It must be remembered that they are now a resource for thousands upon thousands of business owners that have filled Groupon's pockets with over a billion in cash.*
*Estimated 1.6 billion in 2011 fiscal year.
Re: Groupon IPO on hold
#10Maybe they can turn this around by offering their stock for 50% off normal ticker prices. Then surely people, having bought it once and discovered how awesome it is, will come back again and again to pay full price.