Groupon

Groupon IPO Set For November 4, Hoping For $11.4 Billion Valuation

Social buying website Groupon on Friday announced that their official IPO will occur on November 4. The company hopes to raise $621 million during their initial offering, enough to value the company at $11.4 billion.

At one point Groupon had said they could raise as much as $750 million to value the company at upwards of $15 billion however they recently scaled back their expectations after the SEC became wary of the company’s odd accounting practices.

At this time Groupon will only be releasing 5% of company shares in the hopes they can create volatility for their product and push up stock prices for future offerings.

Groupon will be listed on the Nasdaq under the symbol GRPN and shares are expected to sell in the range of $16 to $18.

Before preparing to file Groupon has amended their filing papers to show a smaller quarterly loss than originally suspected. According to their S1 filing Groupon’s loss for Q3 2011 was $10.6 million, far less than the $49 million they loss in the same quarter 2010.

The company’s revenue also skyrocketed in 2011 with a Q3 bringing in $430.1 million up from $81.8 million during the same period last year.

Groupon also grew their user base to more than 143 million members, up from 21 million the year prior while 30 million people purchased a daily-deal voucher in 2011, far exceeding the 4.6 million vouchers the company sold in 2010.

Do you think the current expected valuation for Groupon is too high given the fact that they are still recording losses and using accounting practices that have some investors worried about the viability of its business model?

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