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Groupon Raises $700 Million in IPO

By Chuck Sudo in News on Nov 5, 2011 2:30PM

Image Credit: Seth Anderson

Groupon co-founders Andrew Mason, Eric Lefkofsky and Brad Keywell ended Friday on a high note after the online daily deal pioneer raised $700 million in its Initial Public Offering. The IPO helped value the company at $12.76 billion, making Groupon the largest IPO by an American Internet company since Google raised $1.7 billion with its 2007 IPO.

Mason began Friday announcing the IPO on Groupon's blog and ringing in trading on the New York Stock Exchange. In contrast to the quirky humor or bravado Mason displayed in the weeks leading up to the IPO, he played it straight on the blog:

"Our IPO is a small milestone on our journey, but one that warrants a few words of thanks. Thanks to my cofounders—Eric Lefkofsky and Brad Keywell. Thanks to shareholders. Thanks to our employees. Thanks to our board of directors. And last, but not least, thanks to our customers and merchant partners. I feel incredibly grateful to serve as CEO of Groupon. With our IPO behind us, I couldn’t be more excited about what lies ahead."

Groupon stocks opened at $20 a share and quickly rose 40 percent before ending trading up nearly 31 percent at a value of $26.11 per share. Yet, despite the bullish market on Groupon, critics of the company believe buyers are looking to flip the stock for a quick profit. Analyst Nick Einhorn told Marketwatch:

"The true test will be where it's trading several months from now, when the company reports results for subsequent quarters that will give some indication of whether growth is slowing or staying strong, expenses are staying in check or rising."

Other analysts believe the success of Groupon's IPO will heighten the anticipation for upcoming initial stock offerings like Facebook, which is expected to go public in 2012.