WINDERMERE, Fla. ( Stockpickr) -- This week, Chicago-based daily deals site Groupon is kicking off its roadshow, during which the company will be pitching its IPO shares to institutional investors and large traders.During a road show, company executives and management try to convince savvy market players who operate mutual funds and hedge funds to buy their stock. They present their firm's growth strategies and financial information to give investors a better understanding of why the company needs to go public and how it could be a solid investment opportunity. For example, it's been reported that one of the things that Groupon will be promoting in its roadshow is the company's Groupon Now 2.0 initiative, a mobile app service that delivers deals based on a user's location. >>5 Breakout Stocks to Leverage the Rally Groupon's IPO deal is expected to be priced on the evening of Thursday, Nov. 3, and it's slated to begin trading on Friday morning on the Nasdaq under the proposed symbol "GRPN." Groupon is seeking to sell 30 million shares (less than 5% of the company) at a price of $16 to $18 a share, or $540 million, excluding an over-allotment option that underwriters might not decide to exercise. Groupon's market value would be around $11.4 billion following the IPO, less than half the $25 billion that the company had anticipated in June. That said, even at $11.4 billion, Groupon is still coming to market above the $6 billion buyout offer that Google ( GOOG) reportedly offered the company in 2010. At close to $12 billion, Groupon is valued at eight to nine times its projected 2011 revenues. Once Groupon hits the tape, the stock could jump sharply if traders want a piece of the hot daily deals and social networking player. If a strong rally does indeed play out for Groupon on its IPO day, then a number of similar stocks could be good plays ahead of its IPO. It also doesn't hurt that a number analysts seem to be very bearish on the stock, just like they were on Linkedin ( LNKD) before that stock soared on its debut. Here's a look at a number of stocks that could make for great trades ahead of the Groupon IPO.
Other Social Networking StocksOne more way to play the Groupon IPO would be to jump into some of the other social networking names and look for a spike off a successful showing for Groupon. I would take a hard look at some names such as Linkedin ( LNKD), Sky Mobi ( MOBI), Renren ( RENN), United Online ( UNTD), SINA ( SINA), XO Group ( XOXO) and Ancestry.com ( ACOM). All of these names could easily rack up nice trading returns if the Groupon IPO is a success. With that in mind, I would simply look to trade any intraday strength as we get closer to the Groupon IPO. Two more publicly traded stocks that operate in the daily deals space are Amazon ( AMZN), which is backing Living Social, and Google ( GOOG), which has Google Offers. To see these stocks in action and for more stocks to play the Groupon IPO, including Quepasa (QPSA) and Sohu.com (SOHU), check out the Groupon IPO Stock Plays portfolio on Stockpickr. -- Written by Roberto Pedone in Winderemere, Fla.
Twitter and become a fan on Facebook. At the time of publication, author had no positions in stocks mentioned. Roberto Pedone, based out of Windermere, Fla., is an independent trader who focuses on stocks, options, futures, commodities and currencies. He is also an outside contributor to Beconequity.com and maintains the website Maddmoney.net, which he sold to Blue Wave Advisors in 2008. Roberto studied International Business at The Milwaukee School of Engineering, and he spent a year overseas studying business in Lubeck, Germany.