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Groupon Reduces IPO Shares, Expecting To Raise Upto $621 Million

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 (opens in new tab), 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.

Ravi Mandalia

Ravi Mandalla was ITProPortal's Sub Editor (and a contributing writer) for two years from 2011. Based in Ahmedabad, India, Ravi is now the owner and founder of Parity Media Pvt. Ltd., a news and media company, which specializes in online publishing, technology news and analysis, reviews, web site traffic growth, web site UI. Ravi lists his specialist subjects as: Enterprise, IT, Technology, Gadgets, Business, High Net Worth Individuals, Online Publishing, Advertising, Marketing, Social Media, News, Reviews, Audio, Video, and Multi-Media. He has also previously worked as Dy. Manager - IT Security at (n)Code Solutions.