Groupon IPO Sends Stock Climbing
Groupon, the daily deals site that pioneered the online group discounts, definitely has reason to celebrate as its stock began to climb by more than 30 percent on the heels of its initial public offering on Friday.
The company, which received heavy criticisms from analysts of late for its unsustainable business model, puts its initial public offer at $20 per share, giving Groupon a valuation of almost $13 billion, a bit higher than Google’s when it first went public way back in 2004.
Initially, the price was projected to play around $16 to $18 per share.
On Friday, Groupon sold about 35 million shares as demand produced a sweeping figure that banished the issues surrounding Groupon’s accounting and business model. This means it has raised $700 million in its IPO.
Groupon’s stock soared $6.40, or 32 percent, to $26.40 in late morning Friday trading, though the number was a little lower than when the stock was trading earlier at as high as $31.14.
The stock is trading on the Nasdaq Stock Market under the ticker symbol “GRPN.”
Groupon sends out emails to subscribers offering discount deals for any item. The company slashes 50 percent from the amount that people pay and turns over what is left to the merchant.
Groupon was launched in 2008, thereby inviting imitations. It started with only 37 employees in late 2009 to more than 10,000 at present.
Groupon operates in 35 countries, with expected annual revenue of $500 million this year. The company reportedly profited after just seven months of trading.
In early Friday trading, Groupon shares rose nearly 50 percent to about $27.71 per share.
Groupon is selling 5.5 percent of its available shares, which is lower than that of many prominent tech firms, such as Google Inc. and LinkedIn Corp., which saw its stock climbing to $122.70 on its opening day in May after pricing at $45.
Meanwhile, Groupon bosses in Chicago are said to be throwing a celebration for employees this weekend for the successful IPO.