Bloomberg News

Groupon Said to Close IPO Orders Early on Demand for Shares

November 08, 2011

(Updates with investor’s comment in fourth paragraph.)

Nov. 2 (Bloomberg) -- Groupon Inc. stopped taking orders for its initial public offering a day earlier than planned because of demand for the shares, said two people familiar with the sale.

The company planned to close the order book for stock at 4 p.m. New York time today, said the people, who declined to be identified because the matter is private. Groupon’s shares are scheduled to price tomorrow and begin trading on Nov. 4. The daily-deals site is seeking to raise as much as $540 million selling 30 million shares for $16 to $18 apiece. The top end of the range would value Groupon at $11.4 billion.

Appetite for the shares may be sufficient to sell above the marketed range, even as concern about Europe’s debt crisis ended a month-long rally in the Standard & Poor’s 500 Index this week, according to Walter Todd of Greenwood Capital.

“It shows there is some demand,” said Todd, who oversees $940 million as co-chief investment officer at the Greenwood, South Carolina-based firm. “I’m a little bit surprised, given what the market’s digesting.”

The S&P rallied 17 percent from Oct. 3 through Oct. 28, when volatility hit a two-month low and as Groupon finished its first week of pitching the IPO to prospective investors. This week, the measure has declined 3.7 percent on concern about Europe’s struggle to raise financing to bail out Greek debt.

Groupon is floating a record-low percentage of its total outstanding shares among U.S. Internet companies, helping to stoke demand for the stock. Only 4.7 percent of the unprofitable company’s shares will be sold to the public, less than in any U.S. Internet company IPO of more $200 million since at least 2000, according to Bloomberg data.

Julie Mossler, a spokeswoman for Groupon, declined to comment.

Groupon’s offering is being led by Morgan Stanley, Goldman Sachs Group Inc. and Credit Suisse Group AG. The shares will trade on the Nasdaq Stock Market under the symbol GRPN.

--With assistance from Douglas Macmillan in San Francisco. Editors: Elizabeth Wollman, Donna Alvarado

To contact the reporter on this story: Lee Spears in New York at lspears3@bloomberg.net

To contact the editor responsible for this story: Jennifer Sondag at jsondag@bloomberg.net


We Almost Lost the Nasdaq
LIMITED-TIME OFFER SUBSCRIBE NOW

(enter your email)
(enter up to 5 email addresses, separated by commas)

Max 250 characters

 
blog comments powered by Disqus