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

Sell Groupon at Open: Expert

CHICAGO ( TheStreet) -- Despite rising chatter that Groupon could price its IPO above its expected range, one expert says sell the daily deals site's shares at the open.

"It's an extremely risky IPO that I feel should be flipped on day one -- sell it at the opening," explained Scott Sweet, senior managing partner at IPO Boutique.

Flipping involves buying shares at the offering price and selling them on market open. "This is a tactic some underwriter players choose on certain IPOs to lock in profit," explained Sweet.

The analyst also voiced his broader concerns about Groupon.

"There are 570 Internet-based coupon companies and 1,000 non-Internet ones [plus] Groupon has 10,000 employees, which is four times that of Facebook -- talk about too much SG&A."

"You're looking at a wild card," he added. "There are zero barriers to entry [in this market and] no patents needed."

Groupon, which scaled back the size of its IPO earlier this year, has also come under fire for its accounting metrics and the way the firm has handled its offering.

Nonetheless, the company's debut could rekindle interest in the IPO market.

There is also talk that Groupon could price its offering above its anticipated range of $16 to $18 a share.

Citing three buyside sources, Reuters reports that Groupon could price its IPO $1 to $2 above its current range. The daily deals site is expected to price its offering later on Thursday, and start trading on Friday.

Groupon has not yet responded to TheStreet's request for comment, although Sweet believes that the firm will price higher than expected. "It's my hunch that they will price at $19," he said, adding that the IPO is "many, many times" oversubscribed.

Assuming the midpoint of Groupon's $16 to $18 offering price, the company would be valued at $10.7 billion, although a $19 price would value the firm at $12.02 billion.

Another recent entrant to the public markets, LinkedIn (LNKD - Get Report), reports its third-quarter results after market close on Thursday.

--Written by James Rogers in New York.

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:

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 $124.54 0.00%
AAPL $94.19 0.00%
FB $118.06 0.00%
GOOG $695.70 0.00%
TSLA $222.56 0.00%


Chart of I:DJI
DOW 17,651.26 -99.65 -0.56%
S&P 500 2,051.12 -12.25 -0.59%
NASDAQ 4,725.6390 -37.5850 -0.79%

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs