Groupon’s Successful IPO

Image Source: Reuters via New York Times

Groupon’s final IPO price went from dank estimates of $10-12 to $20 by the time it was priced, raising $700 million on a relatively small offering of its shares. That puts the company’s value at around $20 Billion, by some estimates.

As it turned out, the price could have gone even higher. Prices soared 40 percent above the asking price in the offering’s early hours.

What went right?
1- Investors believe in the long-term vision that deals represent just an anchor for a wide variety of local and national marketing services.
2- They believe that Groupon has established a brand and will outlast the fly by night competition and adjust to compete against major players now entering the market, such as Google and Amazon.

You know the stupid waste of money on the Super Bowl ads? Not so stupid. They really branded the company as a major play for the investment community.

Next up for Local IPOs: Angie’s List, which wants to raise $113 million. AutoTrader. (and based on today’s success, Living Social?)

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