Groupon Beats Expectations With “Unneeded” IPO Cash
Groupon, one of the top daily deals sites, has been yo-yoing this year as to whether or not it was time for their initial public offering. They were set for an IPO over the summer but suffered some setbacks because of the volatile market, and questions about their financial stability and reported numbers. But on Wednesday, they announced that they will have their IPO on Thursday and begin trading by Friday.
Analysts were predicting that the highest amount they could raise for their IPO was $480 to $540 million, but Groupon proved them wrong and was able to raise $700 million for their IPO. The company anticipated that they would get $16-$18 per share but they got $20. Groupon is now valued at $12.7 billion and it has the second largest sale of shares since Google raised $1.9 billion in their 2004 IPO.
The money raised in the IPO will not be used at present since the company deems there’s no use for it now.
“Neither CEO Mason, 31, nor executive chairman and fellow co-founder Eric Lefkofsky, 42, are selling any shares in the IPO. Mason’s stake in the company is now worth about $938.7 million, given the $20 IPO share price, while the stake of Leftofsky, who is Groupon’s largest investor and shareholder, is worth about $2.6 billion.”
Though they sold shares and generated a lot of funding, it is quite questionable as to why the company is floating around 5.5% of the company’s available shares.
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