Groupon scaling back IPO, reports say

The beleaguered daily-deals provider may be valued at $12B or less, and could reduce its total offering to as little as $500 million.

Groupon is scaling back the size of its initial public offering as a result of market volatility and company miscues, according to published reports.

The daily deals provider is expected to offer less than 10 percent of the company at a valuation of $12.5 billion, people familiar with the deal told the Wall Street Journal and the New York Times. Both papers reported that the deal itself, which is expected close in the next couple of weeks, is expected to be $500 million to $700 million.

A more limited offering may have some upside for Groupon. By offering a smaller number of shares to the public, other tech startups--among them, LinkedIn and Zynga--have seen their shares soar on the first day of trading as investor demand outpaced the supply of stock.

These reports come in advance of Groupon's IPO road show, expected to begin next week.

IPO analysts have estimated Groupon might be valued at between $5 billion and $10 billion when the company finally lists its shares on the open market. That's in contrast to the $20 billion to $25 billion that many believed the company was worth when it filed its IPO papers in June.

Groupon, which was expected to go public in September, has also come under increased regulatory scrutiny lately. The Securities and Exchange Commission forced the daily deals provider to revise its filing papers after finding that the company mistakenly reported higher revenue than it should have. Groupon previously reported that it generated $713.4 million in revenue in 2010, but the SEC said that the figure should be $312.9 million.

Complicating Groupon's situation was the departure of its chief operating officer, Margo Georgiadis, who left the company after only five months in the position to return to Google. The previous COO left after only two months on the job.

 

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