Money Matters, Simplified.
Groupon bets big on IPO
by Jamie Anderson - June 3, 2011 - comments
The CEO added that the company pursued models of reinvention and would continue to do so in the future as well, even if it means committing a few mistakes and getting things wrong at times.
Riding on the current wave of renewed investor interest in technology firms, Groupon Inc intends to raise $750 million in an initial public offering (IPO). The Chicago-based company will trade under the ticker GRPN.
In a regulatory filing with the Securities and Exchange Commission (SEC), the leading online-coupon provider divulged that the IPO will be handled by Morgan Stanley, Goldman Sachs Group, and Credit Suisse Group.
Phenomenal growth
The company’s journey till date, since its inception in 2008, has been highly successful.
As on date, Groupon has a subscriber base of 83.1 million spread across 43 countries. The company has sold over 70 million discount coupons for a huge assortment of products and services.
Groupon founder and CEO, Andrew Mason, said that funds raised through the IPO would make it "easier to make big acquisitions." He also divulged that all full-time employees will get equity in the share sale.
Groupon’s sales rose to $644.7 million in the first quarter of the year, up from $44.2 million in the comparative period last year.
However, the company has remained in the red. It incurred a $113.9 million net loss during the first quarter of the current fiscal primarily due to a mammoth $208 million as marketing expense and $178.9 million as selling, general, and administrative costs.
"We spend a lot of money acquiring new subscribers because we can measure the return and believe in the long-term value of the marketplace we're creating," Groupon founder and CEO, Andrew Mason, said.
"In the past, we've made investments in growth that turned a healthy forecasted quarterly profit into a sizable loss. When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences," added Mason.
Innovative business model
The CEO added that the company pursued models of reinvention and would continue to do so in the future as well, even if it means committing a few mistakes and getting things wrong at times.
In the regulatory filing, Mason stated that Groupon is "unusual and we like it that way."
Separately, in a memo to employees, Mason said that funds raised through the IPO would make it “easier to make big acquisitions.” He also divulged that all full-time employees will get equity in the share sale.