News & Resources

Groupon seeking $11.4 billion IPO valuation

Nov 03, 2011 Justin Wagner

Group buying site Groupon will seek an $11.4 billion valuation from its initial public offering scheduled for November 4. The Chicago-based startup also hopes to raise $621 million from the long-awaited offering. However, the company reported this week that its IPO will offer a mere 5 percent of total shares, which may lead to wider market volatility - a condition that may have forced underwriters to scale back the original scope of Groupon's IPO hopes. Earlier this year, Groupon had pushed for a $25 billion valuation, but Friday's announcement points out how internal setbacks and Wall Street volatility forced shareholders to restrain their expectations. "The company, which also was once considering a secondary offering in which major stockholders would sell a portion of their shares, has put that option on hold, according to a person familiar with the matter," reported Shayndi Rice and Randall Smith for The Wall Street Journal. "Because of the negative sentiment around the company, executives decided to restrict the sale of the stock." Other analysts point to the weak state of IPO activity, market turbulence and lax risk management as contributing to Groupon's lukewam IPO.