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Analysts Describe Groupon IPO as "One Long Letdown"



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    CHICAGO, IL - JUNE 10: The Groupon logo is engraved in a glass office partition in the company's international headquarters on June 10, 2011 in Chicago, Illinois. Groupon, a local e-commerce marketplace that connects merchants and consumers by offering goods and services at a discount, announced June 2 that it had filed with the Securities and Exchange Commission for a proposed initial public offering of its Class A common stock. The company, launched in Chicago in November 2008 now markets products and services in 43 countries around the world. (Photo by Scott Olson/Getty Images)

    Grim, but largely unsurprising news on the Groupon IPO front: Wall Street research analysts, who are generally optimistic about companies their firms take public, have rendered unenthused judgment on Andrew Mason's company.

    This explains, in part, likely why Groupon's stock slowed its roll yesterday and dipped somewhat. As of press time, it's up .26 points to $22.81 -- but that's not quite a slam dunk, to use highfalutin Wall Street lingo. No wait, that's basketball.

    Anyway, on Wednesday, analysts at a majority of Groupon's underwriters, like Morgan Stanley and Credit Suisse, have, according to the Wall Street Journal, "issued the equivalent of 'hold' or neutral recommendations, with 'holds' outnumbering 'buys' by a margin of six to five."

    Also from the same WSJ piece: "The analysts' mixed reviews reflect the ongoing questions surrounding Groupon. While the company is growing like a weed -- revenue for the first nine months this year rose more than seven times to $1.12 billion -- it's still unprofitable and the barriers to enter the market remain relatively low."

    Be that as it may, Groupon's stock has rebounded once this week when all of this was still true. It can do it again. It's still anyone's ball game, er, IPO. Right? 

    David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a columnist for EGM. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.