Last month, Groupon rejected a $6 billion offer from Google. Now, after raising nearly $1 billion from bigwig investors like Morgan Stanley, T. Rowe Price, and Fidelity Investments in the past week, the company is moving forward with an IPO that would reportedly value it at upwards of $15 billion and "be among the most anticipated [IPOs] since Google's in 2004," according to Evelyn M. Rusli and Andrew Ross Sorkin in The New York Times. Is the deal site really worth $15 billion?
The price isn't right: "No way!" says Albert Babayev at his alphabias blog. Groupon's business model is "easy to replicate," its customers are "unhappy," and "the Groupon deals have progressively gotten worse." And, Groupon splits its sales with clients, so its real revenues are unclear — reports on last year's take have ranged from $500 million to $2 billion. An IPO seems to me like "a pure exit strategy" by early investors looking to "cash in quickly on an extremely risky hold." Google didn't want to pay more than $6 billion for Groupon, and I'd trust the search engine giant on this one.
"Is Groupon really worth $15 billion?"
But Groupon is really hot: Right now, the deals site is "the most visible and fastest-growing player in their market," says Greg Sterling, as quoted in The New York Times. There's a lot of excitement around Web companies — and the market in general. Groupon is "smart to strike while the iron is hot."
"Groupon advances on IPO that could value it at $15 billion"
And the elements for success are in place: Yes, "$15 billion is an absolutely, startlingly huge number," says Brad McCarty at The Next Web, but Groupon CEO Andrew Mason "seems to have the Midas touch when it comes to his business." It looks to be "massively profitable," though the "company is still in its infant stages."
"Is Groupon on the verge of a $15 billion IPO?"