Initially the strong showing in Groupon‘s IPO had cheered CEO Andrew Mason and fellow executives, as they had spent the past week-and-a-half on the road, pitching to investors and addressing criticism about an easily replicable business model, slowing growth and other concerns.
Another reason for the increased interest in the IPO is that the Groupon IPO may in fact determine the future success for daily-deals website to go public. The company is now targeting a price $1 to $2 above the current $16 to $18 per share range. At $19, the IPO would value Groupon at $12.02 billion. At $20, it would value the company at $12.7 billion.
Initially the company had scaled back its IPO to $540 million, from a previous target of up to $750 million, amid concerns about the advent of high-powered rivals from Google Inc to Amazon.com Inc.
Groupon’s IPO may pave the way for other, smaller “daily deals” operators. If it does well, it would also bode well for other Internet companies also considering tapping markets, including social gaming company Zynga and social network Facebook.
Despite robust initial demand, however, the risk is that some investors may flip Groupon on the first day. Later on, early-stage investors might want to cash out through secondary issues, putting downward pressure on the stock.
(아주경제 앤드류 이 기자)
reporter
Park Sae-jin
swatchsjp@ajunews.com