Groupon Considering Increasing IPO Price Range over Higher-Than-Expected Demand

October 31 00:00 2011

New York, October 30 ( – Groupon Inc. is believed to be considering making an updated filing with a higher IPO price range with the U.S. Securities and Exchange Commission early next week amid higher-than-expected demand for shares from investors. In order to create a demand for the stock, Groupon is offering a very low percentage of its total outstanding shares. The company is aiming to complete the offering on Nov. 3 which will have only 4.7 percent of the unprofitable company’s shares for sale to the public.

Brett Harriss, an analyst at Gabelli & Co. in Rye, New York, who was one of about 400 people attending the Groupon investor conference in New York City yesterday, said “I’m sure that it’s going to be fully subscribed. It’s a thin stock to start and, despite the recent criticism, they tell a good story.”

The target of Groupon is to raise as much as $540 million by selling 30 million shares for $16 to $18 apiece, according to an Oct. 21 regulatory filing. Groupon would become even more expensive than Amazon and Microsoft by selling at a higher price. The current price range values the company at about five times projected 2012 sales compared with 2.9 for Microsoft and 1.5 for Amazon.
According to filings, a net loss of $10.6 million attributable to the company was reported by Groupon for the three months through September, bringing losses in the first nine months of the year to $214.5 million.