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Groupon's $750 Million IPO Raises Questions

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Andrew Mason Raises More Questions than Cash

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The waiting is over: on Thursday, Groupon filed its plans to raise $750 million for an upcoming IPO.

Is it just me, or does that number seem a bit low after the rapid-fire growth the company has seen (and publicized heavily) this year? In several years of financial reporting experience, I have not seen or at least experienced a letdown quite like this one.

I expected fireworks, at least, or an especially clever Groupon IPO-related deal in my inbox. After all, the figures being bandied about were as high as $25 billion. And after the unexpectedly high LinkedIn IPO in May, investors were expecting a lot more.

The company’s S-1 filing didn’t detail pricing for the shares, nor the number that would be issued. It also doesn't say when the IPO will take place, but it does provide details about the company's growth, according to a breakdown in VentureBeat.

According to the article, Groupon “brought in $94,000 in revenue in 2008, $30.5 million in 2009 and $713.4 million in 2010…Groupon has consistently lost money each quarter except for one quarter — the first quarter of 2010, when it brought in an $8 million profit. Groupon lost $456.3 million in 2010 and $6.9 million in 2009. The company lost $146.5 million in the first quarter this year.”

It also included a letter from CEO Andrew Mason to investors that listed the reasons Groupon has operated the way it has, and why they should brace for more unusual business practices in the future. Given its (short but explosive) history, it’s possible that Mason has some kind of brilliant/unexpected plan up his sleeve.
 
After all, he had the intestinal fortitude to turn down Google’s $6 billion offer, too. But why?
 
Inc. Well will be keeping eyes open in the coming weeks, so stay tuned.

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