Facebook vs. Groupon: The tale of two IPOs
Groupon rushed its IPO and is now paying the price, while Facebook's patience is about to be rewarded.
Facebook and Groupon are two of the world's largest Internet companies, but their trajectories couldn't be any more different. One will become the largest Internet IPO in history, while the other can't find a way to stop its freefall.
I can't help but feel sorry for Groupon. In just the last two weeks, Groupon revised its fourth-quarter revenue downward due to higher merchant refunds, was hit with a shareholder lawsuit and took a beating from the press.
The result: Groupon's stock price has fallen off a cliff, and then some. Once worth $26.19 per share, Groupon has now hit the all-time low of $14.18, and things are likely to get worse before they get better.
In its quest to become the fastest-growing company in history, Groupon rushed its growth and its IPO. It added thousands of employees, merchants and customers to a foundation that simply couldn't support their weight. The result are the cracks you see forming in Groupon's business.
Facebook, on the other hand, hasn't veered one millimeter off course as it sails toward its monster IPO. It hasn't received a flood of negative press or been questioned for its accounting practices by the SEC. Its finances are solid, thanks to the steady stewardship of Mark Zuckerberg and Sheryl Sandberg.
Facebook didn't rush toward its IPO -- Zuckerberg took eight painstaking years to grow its userbase, build up the business and hire a world-class executive team. Facebook has had its share of controversies, but none of them involve its finances or accounting, and no hidden surprises have popped up during the IPO process.
Barring a last-minute surprise (like the markets crashing), Facebook will break the $100 billion barrier, and I suspect its IPO will skyrocket beyond that price very quickly.
Facebook has never been focused on the exit, thanks to Zuckerberg. That's why upcoming exit next month is going to be one for the record books.