Groupon hopes to raise $750M in IPO

http://www.courier-journal.com/article/20110602/BUSINESS/306020080/Groupon-files-papers-hotly-anticipated-IPO?odyssey=tab|topnews|text|Home

Can we say Tech Bubble 2.0?

What are the chances the stockholders end up in a reverse Groupon situation? Instead of getting a $50 gift certificate for $25, they end up with a $1 stock they paid $100 for?

When's the SportsJournalists.com IPO due out?

 

http://smallbusiness.aol.com/2010/08/09/groupons-andrew-mason-the-unlikely-dealmaker/1#c29811638/

Well what the hell good is it, then?

 

I was kind of thinking of getting an eTrade of brokerage account solely to try to buy some of the IPO, and then immediately selling after that first day. I can't believe that we're seemingly doing the tech bubble thing all over again.

Groupon, at least, seems really popular, and I've bought stuff off of it. LinkedIn though, wow. No idea why that's so valuable.

 

Why are these companies that have vast armies of customers they are unable to monetize considered valuable? Isn't that the same essential business model of today's newspapers?

 

I didn't realize this until the other day, when LinkedIn sent me an email trying to get me to upgrade to its pro service. Apparently head-hunters can pay $100 a month for their top-tier packages. (There are some lower-priced ones, too, for us peons, but I've never seen fit to use anything more than the free version.) I'm sure few use it now, but I get where that could be seen as a cash cow.

 

The trouble with that is -- at least from what I've heard -- is that the IPO may be limited to high-end investors. Almost like scalpers getting first dibs on tickets for guaranteed sell-out concert. They get to buy at the listed price and then let the market decide how much profit they'll make.

It might be easier to win the lottery.

 

Groupon will be out of the picture when Facebook places goes national. LinkedIn however, is a site that every ambitious worker is on. They are also rolling out a "apply for job" button that employers can put on their site. The employees resume will be uploaded, making sites like careerbuilder irrelevant.

Now maybe that $80 Linkedin stock is too much. But not for those who got it at $45 and not for those who realize they have captured a niche. Groupon however is no different than living social, restaurant.com, facebook deals. Not all of them will survive.

 

The thing is though, I view Groupon as the best of that lot. It is the Google (at least so far) to everyone else's Lycos and Dogpile and Yahoo engines. No idea if they can maintain it, but when I think of "online coupons" right now, it's Groupon that springs to mind.

The elephant in the room would be if Facebook or Google (GMail), someone with an already huge base, cuts them out somehow.

 

Exactly. A hot IPO will only go to the preferred customers of the investment firms underwriting the IPO.

You can't buy it at the IPO price on opening day. On opening day, it trades where it trades.

Former Senator Al D'Amato made a lot of money because he had access to IPOs.

Also, when you read about a stock being up 50% or more on opening day, everyone celebrates it. In reality, the underwriters screwed the company and didn't set the IPO price high enough.

They do it on purpose because they want the pop and the associated buzz. They want their customers to make money.

You will sometimes see an adjustment to the originally planned IPO price prior to it going public if it's "over subscribed".

But, it's still one of the biggest games on Wall St. In the mid/late 90's when tech/internet companies were going public regularly, it was insane.

My favorite big IPO followed by a spectacular flameout, theglobe.com:

http://en.wikipedia.org/wiki/TheGlobe.com

 

Two more favorite flame outs from the dot.com era, both former naming rights partners of NFL clubs and their stadiums (stadia?):


CMGI's stock boomed in the dot-com bubble of the late 1990s, peaking at $163 in 2000, for a market capitalization of more than $40 billion. The stock crashed heavily when the bubble burst, falling below $1 in 2002.

http://en.wikipedia.org/wiki/ModusLink_Global_Solutions


The company's stock price plunged in response to the departures and to wider-than expected losses: the stock, which had traded as high as $60.94 a share in 2000 (after a split), closed at 18 cents in late March, 2001.

http://en.wikipedia.org/wiki/PSINet

 

Ok, so can someone explain to me who gets to trade on IPOs and who can't? And why? Sorry if it's already been explained. I'm an idiot. An idiot who wants to put in on the Groupon IPO (if possible, which it seems like it isn't).

 

YF: CMGI lost the naming rights to Gillette Stadium before said stadium opened for business in 2002. However, deep in the bowels of said edifice, some CMGI nameplates could still be found for several years, amusing me no end.