8 Important Facts From Groupon's Unusual IPO Filing

By Alexis C. Madrigal

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.

MORE ABOUT GROUPON'S IPO:

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http://www.theatlantic.com/technology/archive/2011/06/8-important-facts-from-groupons-unusual-ipo-filing/239847/