Daily deals giant Groupon has reduced the number of shares it plans to offer under its initial public offering as it sets the IPO date to November 4.
According to the Wall Street Journal, the company plans to offer only 5.4 percent of its available shares to the public. Groupon said that it plans to raise $621 million in the IPO, which will be released on November 4, valuing the company at $11.4 billion.
The proposed price range for the shares is $16-$18 per share, the company said. Groupon continues to grow both within and outside the United States but, it needs money to expand further and hence the IPO. Earlier, the stability of the entire daily deals model was put to question when Facebook had shut down its newly started deals service.
When the reports of a Groupon IPO had started to surface, it was rumoured that the company planned to raise $1 billion from the IPO, valuing the company between $15 billion to $20 billion. "On their cash position, it's clear that they're looking to change their model pretty drastically soon - that is, cut down on expenses and focus on profitability," said Forrester Research analyst Sucharita Mulpuru.
"On the flip side, that means slower growth. But they have no choice. More cash isn't buying them more revenue anyway", she added.