8 Important Facts From Groupon's Unusual IPO Filing

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Groupon filed for an initial public offering with the Securities and Exchange Commission. While it begins with a first-person letter from the company's CEO, the rest of it is fairly standard financialese. Here, we pulled out eight things you need to know from their S-1.

  1. The company is bleeding money. A lot of it. Groupon had a net loss of $103 million in the first quarter of 2011 and has lost $522 million since its founding.
  2. Even though the company is generating a lot of revenue. Groupon brought in $644 million, although that includes the money they pay out to merchants.
  3. The big long-term costs are in marketing. The company spent $208 million on marketing, mostly online ads, in just the first quarter of 2011.
  4. Groupon continues to grow like wildfire. Let's not lose sight of this fact. In November of 2008, Groupon did not exist. In the first quarter of 2011, 15.8 million people had purchased a Groupon for one of 57,000 merchants.
  5. The majority of Groupon's revenue is from outside North America. 54 percent of the company's revenue comes from overseas. That business line got going with the acquisition of CityDeal in May 2010.
  6. Groupon is worried about the CARD Act. The Credit Card Accountability Responsibility and Disclosure Act of 2009, or the CARD Act, may force Groupon to redeem their offers for much longer, increasing their liabilities. "In the event that it is determined that Groupons are subject to the CARD Act... our liabilities with respect to unredeemed Groupons may be materially higher than the amounts shown in our financial statements and we may be subject to additional fines and penalties."
  7. The acquisition of the German deals site CityDeal cost Groupon $204 million.
  8. The biggest single investment in Groupon totaled $175 million. The $140-billion Growth Fund of America plowed the nine-figure investment into Groupon in exchange for 5.5 million Series G Preferred Shares in December 2010.

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Alexis C. Madrigal

Alexis Madrigal is a senior editor at The Atlantic, where he oversees the Technology Channel. He's the author of Powering the Dream: The History and Promise of Green Technology. More

The New York Observer calls Madrigal "for all intents and purposes, the perfect modern reporter." He co-founded Longshot magazine, a high-speed media experiment that garnered attention from The New York Times, The Wall Street Journal, and the BBC. While at Wired.com, he built Wired Science into one of the most popular blogs in the world. The site was nominated for best magazine blog by the MPA and best science Web site in the 2009 Webby Awards. He also co-founded Haiti ReWired, a groundbreaking community dedicated to the discussion of technology, infrastructure, and the future of Haiti.

He's spoken at Stanford, CalTech, Berkeley, SXSW, E3, and the National Renewable Energy Laboratory, and his writing was anthologized in Best Technology Writing 2010 (Yale University Press).

Madrigal is a visiting scholar at the University of California at Berkeley's Office for the History of Science and Technology. Born in Mexico City, he grew up in the exurbs north of Portland, Oregon, and now lives in Oakland.

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