Shares of “daily deal” company Groupon opened sharply higher Friday (11/4) on Nasdaq after its IPO priced Thursday evening at $20 per share. That had been above the expected range of $16-18.
The IPO pricing made billionaires of founder and CEO Andrew Mason, Chairman Eric Lefkofsky and early investor Brad Keywell. The company itself raised $700 million from selling new stock.
Groupon’s newly public shares shot up over 40% from the IPO price as trading began. The stock briefly touched $31.14 before falling back into the mid-20s. The trading price valued Groupon at nearly $20 billion, so it appears the company did right by passing on a $6 billion buyout offer from Google last year.
Groupon now claims 143 million subscribers to its online “daily deals” service through a wide variety of outlets. Q3 revenues were $430 million, with the still-young company’s loss cut to under $11 million.
RBR-TVBR observation: This seems to be a pretty good business, but the business model is easily duplicated and a number of media companies are doing just that. If you already have a local sales force, who needs a third-party vendor?