Groupon shares jumped more than 30 percent on Wall Street on Friday after the online daily deals sensation raised US$700 million in the biggest initial public offering (IPO) by an Internet company since Google Inc.
Groupon shares were listed on the NASDAQ market at US$20 and rose as high as US$31.14 in early trading, before closing at US$26.11, a gain of 30.55 percent on the day.
Groupon, which is trading under the symbol “GRPN,” hailed its success as the second-largest IPO after Google, which reaped US$1.7 billion when it went public in August 2004.
It was valued at $12.7 billion at the IPO price, despite being dogged by questions in recent months about its accounting methods, business model and failure to turn a profit.
Groupon, which rejected a US$6 billion takeover offer from Google a year ago, sold 35 million shares of stock at US$20 per share, higher than the initial US$16 to US$18 price range.
“Our IPO is a small milestone on our journey,” Groupon chief executive Andrew Mason said in a blog post. “With our IPO behind us, I couldn’t be more excited about what lies ahead.”
Groupon’s stock market debut is being closely watched by investors hungry for technology stocks and market analysts on the lookout for signs of another dot-com bubble.
There have been several IPOs by Internet firms this year, but the most eagerly awaited are social games giant Zynga Game Network, Inc, which has already filed its papers for an IPO, and Facebook, which has not revealed its plans.
Career-oriented social network LinkedIn Corp went public in May at US$45 a share and closed at US$82.37 on Friday.
However, not all technology IPOs have been as successful.
Pandora shares closed at US$15.22 on Friday, below the June listing price of US$16 for the popular Internet radio site.
Groupon has enjoyed phenomenal growth since its founding in 2008 — going from 37 employees two years ago to more than 10,400 presently — but its rise has not been without controversy.
Renaissance Capital, a research company that specializes in IPOs, said Groupon’s long-term success depends on an unproven business model.
“Regardless of the rapid growth Groupon has used to infatuate potential investors, the company still has yet to turn a profit,” Renaissance Capital said. “Future earnings will largely depend on Groupon’s ability to reduce marketing expenses effectively, while maintaining customer growth.”
“Additionally, it must withstand rapidly increasing competition in the space, including from large companies such as Google and Amazon,” which, like Groupon, are also offering daily discounts from selected merchants, it said.
In a blog post, analyst Jon Ogg of the Web site 247WallSt.com echoed some of the concerns expressed by others about Groupon.
“It has nothing unique in its model other than having a highly paid sales force,” Ogg said.
“If you were given shares at the IPO, lucky you,” he said. “If not, let’s just say that Groupon is not exactly a suitable investment for widows and orphans.”
Renaissance Capital said some of the initial investor interest in Groupon might stem from the relatively limited number of shares the company offered — just 5.5 percent of its outstanding shares.
Virginie Lazes of investment bank Bryan, Garnier & Co said companies generally place 15 percent to 20 percent of their shares in an IPO and Groupon’s debut “has been structured to create an immediate hit.”
Groupon is present in 175 North American markets and 45 countries and has 142.9 million subscribers. It sold 33 million “Groupons,” or discount coupons, in the third quarter of the year.
In a filing with the US Securities and Exchange Commission, Groupon reported a net loss of US$308.1 million for the first nine months of the year compared with a loss of US$77.7 million during the same quarter last year.
TECH RACE: The Chinese firm showed off its new Mate XT hours after the latest iPhone launch, but its price tag and limited supply could be drawbacks China’s Huawei Technologies Co (華為) yesterday unveiled the world’s first tri-foldable phone, as it seeks to expand its lead in the world’s biggest smartphone market and steal the spotlight from Apple Inc hours after it debuted a new iPhone. The Chinese tech giant showed off its new Mate XT, which users can fold three ways like an accordion screen door, during a launch ceremony in Shenzhen. The Mate XT comes in red and black and has a 10.2-inch display screen. At 3.6mm thick, it is the world’s slimmest foldable smartphone, Huawei said. The company’s Web site showed that it has garnered more than
CROSS-STRAIT TENSIONS: The US company could switch orders from TSMC to alternative suppliers, but that would lower chip quality, CEO Jensen Huang said Nvidia Corp CEO Jensen Huang (黃仁勳), whose products have become the hottest commodity in the technology world, on Wednesday said that the scramble for a limited amount of supply has frustrated some customers and raised tensions. “The demand on it is so great, and everyone wants to be first and everyone wants to be most,” he told the audience at a Goldman Sachs Group Inc technology conference in San Francisco. “We probably have more emotional customers today. Deservedly so. It’s tense. We’re trying to do the best we can.” Huang’s company is experiencing strong demand for its latest generation of chips, called
ISSUES: Gogoro has been struggling with ballooning losses and was recently embroiled in alleged subsidy fraud, using Chinese-made components instead of locally made parts Gogoro Inc (睿能創意), the nation’s biggest electric scooter maker, yesterday said that its chairman and CEO Horace Luke (陸學森) has resigned amid chronic losses and probes into the company’s alleged involvement in subsidy fraud. The board of directors nominated Reuntex Group (潤泰集團) general counsel Tamon Tseng (曾夢達) as the company’s new chairman, Gogoro said in a statement. Ruentex is Gogoro’s biggest stakeholder. Gogoro Taiwan general manager Henry Chiang (姜家煒) is to serve as acting CEO during the interim period, the statement said. Luke’s departure came as a bombshell yesterday. As a company founder, he has played a key role in pushing for the
Vanguard International Semiconductor Corp (世界先進) and Episil Technologies Inc (漢磊) yesterday announced plans to jointly build an 8-inch fab to produce silicon carbide (SiC) chips through an equity acquisition deal. SiC chips offer higher efficiency and lower energy loss than pure silicon chips, and they are able to operate at higher temperatures. They have become crucial to the development of electric vehicles, artificial intelligence data centers, green energy storage and industrial devices. Vanguard, a contract chipmaker focused on making power management chips and driver ICs for displays, is to acquire a 13 percent stake in Episil for NT$2.48 billion (US$77.1 million).
RSS