This Day On The Street
Continue to site
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

A Coupon on Groupon in IPO

Story updated to include calculations of Groupon's growth starting in the 11th paragraph.

NEW YORK ( TheStreet) -- Groupon's new valuation of $11.4 billion is less than half of the $25 billion it asked for in its June filing -- making the company four times more attractive to investors than previous IPO attempts.

Groupon submitted an amended initial public offering on Friday, putting its previously delayed IPO on track for early November and offering its biggest price cut yet.

Still to be seen is whether -- like its deals for spa treatments and pizza slices -- Groupon's IPO price cut be big enough to attract buyers?

The company expects to sell 30 million shares -- 4.7% of its existing 632 million share base -- for as much as $18 per share. The IPO would raise $540 million through the offering. The company will trade under the ticker GRPN.

In its new filing, the Chicago based online deals site founded three years ago reported revenue of $430.2 million in the third quarter of 2011 and quarter-over quarter growth of 9.6%, a slowing of its 33% second quarter growth rate.

Nevertheless, revenue is at $1.12 billion nine months into the year. It means that revenue is expected to end the year having quadrupled since 2010. Today's filing shows the company's loss grew to $308 million in the first nine months into the year, but may be lower than the $456 million it reported at the end of last year.

Because of its revenue in 2011 that's already exceeded $1 billion, Groupon is now seeking less than 10 times sales valuation in its IPO, significantly lower than its previous 36 times 2010 revenue valuation and those used to value LinkeIn (LNKD - Get Report), Pandora (P - Get Report) in their offerings.

LinkedIn was valued at roughly 38 times 2010 sales and Pandora was given a price of near 20 times 2010 sales when they did IPO's earlier in the year. By looking at its growing revenue since last year -- and since it delayed IPO efforts, Groupon's new valuation only double's its valuation from a previous $6 billion bid by Google (GOOG) gave it at the end of 2010.

On a non GAAP-basis, so-called consolidated segment operating income (which excludes acquisition and stock-based compensation expense) came in at a small loss of $10.6 million from $101.2 million. This quarter, the number of Groupon's email subscribers grew 24%. Of its now 142 million subscribers, 29.5 million purchased a Groupon nine months into the year.
1 of 2

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Real Money

More than 30 investing pros with skin in the game give you actionable insight and investment ideas.

Product Features:
  • Access to Jim Cramer's daily blog
  • Intraday commentary and news
  • Real-time trading forums
Only $49.95
14-Days Free
14-Days Free
LNKD $109.97 0.00%
P $7.88 0.00%
AAPL $95.01 0.00%
FB $99.75 0.00%
GOOG $682.74 0.00%


Chart of I:DJI
DOW 16,027.05 -177.92 -1.10%
S&P 500 1,853.44 -26.61 -1.42%
NASDAQ 4,283.7530 -79.3910 -1.82%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs