Many tech darlings are holding off on their initial public stock offerings, hoping they can wait until the turbulent market becomes a bit more receptive. Not Groupon. After months of speculation, the daily-deals giant is going public on Nov. 4, seeking to raise as much as $540 million by selling off just 4.7 percent of its shares. Once an extremely promising web property, Groupon has fallen from grace in recent months, as filings revealed that the company is highly unprofitable and bleeding hundreds of millions dollars. Will an IPO help Groupon resume its meteoric rise?
Groupon really needs the cash: This move may be more "necessity than choice," says Ari Levy at Bloomberg. Groupon is strapped for cash, with marketing costs having grown by 37 percent last quarter. As of the end of September, Groupon owed merchants nearly twice as much as it held in cash. In the first nine months of the year, Groupon lost $214.5 million. But perhaps going public now "may cushion Groupon against slowing sales growth and ballooning costs and give the company time to tweak its strategy."
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