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Report: Groupon may delay IPO
SAN FRANCISCO (AP) - Online coupon seller Groupon Inc. may delay its plans to go public due to concerns about the stock market’s stability, according to a report.
Citing an unnamed source who is familiar with the matter, a Tuesday story in The Wall Street Journal reported that the company called off its roadshow and is reconsidering when to go through with its initial public offering “on a week by week basis.”
The source said Groupon had planned an investor roadshow for next week and expected to price its stock in the middle of the month.
The source added Groupon was questioned by the Securities and Exchange Commission about a memo CEO Andrew Mason recently sent to employees, which was leaked to media late last month. The SEC imposes a “quiet period” on companies before an IPO, limiting what they can say publicly.
The memo spoke positively about Groupon and defended its use of an unusual accounting metric in its IPO registration documents that strips out the site’s large marketing and subscriber-acquisition costs. Following regulatory scrutiny, the company amended its IPO filing in August to remove the metric, called adjusted consolidated segment operating income, or ACSOI.
Groupon, which offers consumers daily discounts targeted toward their city and preferences, took the first step toward going public in June when it filed IPO registration papers with the SEC. The company said it hoped to raise up to $750 million in the IPO, but that figure often changes as investment bankers get a better idea of the demand for the stock.
Venture capitalists and other investors already have poured $1.1 billion into the company, a rather large sum for a service founded just 2 1/2 years ago by Mason and Eric Lefkofsky. Groupon started as a side project to another website called The Point that helped raise funds for various causes.
Back in October 1996, Wired Magazine abruptly canceled its own IPO, blaming “adverse market conditions” in an SEC filing. Investor demand for the stock was cool, and before killing the offering Wired had cut the proposed price of its stock by 25 percent. But a leaked memo from the company’s CEO about the IPO made its way online, making some wonder if the deal was pulled to avoid the appearance of wrongdoing.
By Donald Lambro
Growth spikes are little more than trend-free anomalies
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