Is Groupon Really Worth $15 Billion?

Quite a few Wall Street analysts think so...

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When Google valued Groupon at $6 billion hardly anyone could believe it. The company, after all, sells digital coupons for bikini waxes, is only 2-years-old, and has dozens of competitors. But that was 2010. According to reports on Thursday night, the company is now pondering an initial public offering valuing it at--wait for it--$15 billion. The New York Times says the IPO is slated for spring of this year, with Morgan Stanley a likely contender to take the company public.

  • Is It Really Worth $15 Billion, wonders Brad McCarty at The Next Web: "Suffice it to say, $15 billion is an absolutely, startlingly huge number. But Groupon's golden child Andrew Mason seems to have the Midas touch when it comes to his business. Nevertheless, the company is stil in its infant stages, even if it does appear to be massively profitable."
  • It's Not as Crazy as It Might Sound, writes James Johnson at The Blog Herald: "While the possibility of another web bubble may exist, company’s this time around actually have business plans and with an estimated $50+ million dollars switching hands from buyers to Groupon on a monthly basis and those numbers expected to continue their upward swing, this may be one IPO worth a closer look."
  • Groupon Is Beginning to Soar Past the Competition  "In the past year, Groupon has expanded from one to 35 countries, launched in 500 new markets (up from 30 in 2009), grew subscribers by 2,500% and worked with nearly 60,000 different businesses,"notes Mike Melanson at Read Write Web. "The closest competitor in the market, LivingSocial, recently raised $175 million, a figure now dwarfed by Groupon's latest round." Dealbook notes that the company has grown its workforce so rapidly that it has had to relocate its meetings to a nearby church.
  • An Analogous IPO  "To put the potential Groupon IPO into perspective," writes Faith Merino at Vator News, "we might reflect on another widely anticipated IPO a few years ago. Back in 2004, Google offered 19.6 million shares for $85 a pop.  The company ended up selling $1.67 billion, which gave it a market cap of $23 billion.  Can Groupon replicate that success?"
  • This Will Have a Huge Impact on Social Media Start-ups, writes digital marketing strategist Mark Evans: "The other fascinating thing about Groupon is the impact it will have on the financial dynamics of the social media and high-tech sector. Groupon’s apparent interest in an IPO may just be the “finger in the dyke”. If Groupon does do an IPO and it’s successful, it could release a wave of other social and high-tech IPOs looking to take advantage of the enthusiasm and demand for new investment opportunities."
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