05 June 2011

Groupon IPO

Groupon filed for IPO, looking to raise at least $750 million. Groupon had evenues of $713 million and revenues grew 22.7X in 2010. Quarter 1 2011 revenues were at $644 million. The company lost $456 million last year and lost $146 million last quarter.
Groupon has 83.1 million subscribers, 15.8 million of which have purchased a Groupon. There have been over 70 million Groupons sold as of today with 30 million sold in 2010 and 28 million bought in the first quarter of 2011.

But would you want to invest into this IPO?
The company is using its vendors and merchants to finance its business. They are having serious cash flow problems. Groupon is effectively insolvent because they owe a net $230 million in accounts payable and are currently burning $100 million a quarter.

Groupon’s shareholder structure makes it so that public market investors will have very little say in the company. In short, nobody knows for sure that investing in Groupon is a bad bet. The company could continue its meteoric rise, and make a bunch of people a bunch of money.

Video bellow shows what analyst think of Groupon IPO:

1 comment:

Anonymous said...

Businesses have the option to offer a limited number of Groupons as to avoid what happened with the Portland bakery. It's not Groupon's fault that business owners don't think through the logistics of handling a spike in business. To get more info please visit http://help-essay.com/buy-essay.