IPO on the Books, Groupon Eyes Second Public Offering

By Chris Bentley in News on Nov 8, 2011 8:20PM

Today’s daily deal: About $25 for a share of Groupon. The online coupon company went public last week, raising $700 million in its Initial Public Offering.

Now the company, valued at $12.76 billion, is prepping its secondary offering. Only 6 percent of their shares are available for public trading — not enough, Crain's observed, for Groupon’s venture-capital investors to cash out, or for big mutual funds to buy in and stabilize the stock price:

Groupon's 6% float is the smallest for any IPO this year and well below the average of 29%, according to New York-based research firm Dealogic. Without a secondary offering, the stock will be thinly traded and volatile, while big investors sit on the sidelines and Groupon's venture backers and company insiders sit on their holdings.

Groupon’s IPO Friday exceeded expectations, renewing concerns that the daily deal company’s business model may be unsustainable. They need a rising stock price to put more shares on the market within the next few months. To achieve that, they'll need to allay fears that the company's best growth and profits are behind them. The price is flagging slightly at the moment.