BiggnightsGroupon Files for IPO with SEC
June 3rd 2011 06:50
Groupon, one of the most innovative deal-of-the-day websites, officially announced its intent to go public yesterday. Groupon filed with plans to raise up to $750 million in their initial public offering.
Groupon has seen extraordinary growth in the past two years, but unfortunately for them, so has the industry they are in, which has few, if any, barriers for entry. Therefore, Groupon now has numerous competitors all trying to fight for the same market, not to mention even newer companies like Yipit, who go one step further by collecting data from different deal sites and finding the best, personalized deals.
For that reason alone, many investors feel as though Groupon may be a bit overvalued and not considered a premium investment. However, Groupon has grown so exponentially that it is hard to estimate where they will be in just a few years. It is an interesting case because the profitability of the company really relies on the commitment of its customers and how Groupon builds their relationships in comparison to other deal sites.
Groupon has had previous opportunities to sell the company. Yahoo and Google were both reported to attempt to buyout the US company that saw its monthly revenues grow from $11 million to $89 million between January 2010 and January 2011, only to fall to $62 million in February 2011.
Whether the proposed $25 billion valuation will hold up or not remains to be seen, but it will be interesting to keep an eye on how investors react to Groupon’s IPO announcement.
Groupon has seen extraordinary growth in the past two years, but unfortunately for them, so has the industry they are in, which has few, if any, barriers for entry. Therefore, Groupon now has numerous competitors all trying to fight for the same market, not to mention even newer companies like Yipit, who go one step further by collecting data from different deal sites and finding the best, personalized deals.
For that reason alone, many investors feel as though Groupon may be a bit overvalued and not considered a premium investment. However, Groupon has grown so exponentially that it is hard to estimate where they will be in just a few years. It is an interesting case because the profitability of the company really relies on the commitment of its customers and how Groupon builds their relationships in comparison to other deal sites.
Groupon has had previous opportunities to sell the company. Yahoo and Google were both reported to attempt to buyout the US company that saw its monthly revenues grow from $11 million to $89 million between January 2010 and January 2011, only to fall to $62 million in February 2011.
Whether the proposed $25 billion valuation will hold up or not remains to be seen, but it will be interesting to keep an eye on how investors react to Groupon’s IPO announcement.
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