Most Successful IPO since Google
Nov 7th, 2011 by adrianlai
I agree with Alison’s blog. Despite skepticism about the company’s business model, Groupon Inc. had a very successful IPO last week. In fact, it was the largest IPO of a US Web company since Google. It also turned several people, including CEO Andrew Mason, into billionaires. Early investors in the company, such as New Enterprise Associates (NEA) who bought 87 million
shares for $14.8 billion, made a killer profit from this wildly successful IPO. NEA’s shares were valued at $2.27 billion at $26 per share, which amounts to a return of more than 153 times its investment.
While some critics believe this initial success of Groupon won’t last long, I see Groupon as a company that will be compared to the likes of Google and Apple. All the investors who put their own money into the company aren’t oblivious to the criticisms of Groupon. They all know there is next to no barrier to entry in the group-buying industry, the business model may not be sustainable, and there are doubts about the financials of the company. But even with all these indications of a flawed business, Groupon managed to create a valuation at $16 billion. With this new infusion of capital, I believe Groupon is going to continue improving and expanding its services, and eventually silencing all the critics.
More information can be found here.