"Groupon is only floating a small amount of shares, 35 million – about 5.5% of its 637.3 million shares outstanding." This reminds me of Jason Fried's prank that 37 Signals valuation tops $100B! http://37signals.com/svn/posts/1941-press-release-37signals-...
I guess, but that is how private companies are valued every day. I sell you 5% for $1 million, we are both agreeing that the company is worth $20 million.
Eh, ish. If the total supply of shares is 5% of the company, they'll be worth more individually than if the whole company was up for sale. That's just supply and demand at work. If you genuimely think that the company is worth 20 million and can buy 5% of it for 1 million and stop anyone else from doing so, that's a really good deal.