Groupon Inc., the online daily coupon site, has filed for an initial public offering, capitalizing on investor infatuation with social media companies that have yet to prove they are the real deal.
The company filed to raise up to $750-million (U.S.) in its IPO, an offering that has been widely speculated about for months and comes hard on the heels of a number of hot technology debuts.
Other Internet companies including LinkedIn Corp. and China's Renren Inc. have had strong IPO premieres in recent months, causing speculation that other companies would rush to follow.
A string of hot Internet companies including Facebook and Twitter have received multibillion-dollar valuations, raising questions about how these companies, albeit fast-growing, could justify the sky-high valuations.
"As with any business in a 30-month-old industry, the path to success will have twists and turns, moments of brilliance and other moments of sheer stupidity," Groupon chief executive Andrew Mason said in a letter to potential stockholders that was attached to the filing.
Thursday's IPO filing did not specify the number of shares to be sold in the IPO, the price range, or the exchange, though it did say the shares would trade under the symbol "GRPN." It also said the $750-million figure is preliminary and could change.
Founded in November 2008 by Mason, a young and brash entrepreneur who majored in music at Northwestern University, Groupon offers members discounts on everything from meals at restaurants to sky-diving excursions. The "group" part of the name refers to the fact that many of the deals are activated only when a certain number of people sign up for them.
Groupon takes a commission from the merchants that provide the services, and in the first three months of the year its revenue totaled $644.7-million. But it incurred a net loss in the period of $102.7-million, as it spent heavily to expand, both by acquiring customers and by signing up merchants.
"Groupon's had a lot of success in its early stages, but the model of group buying has limited barriers to entry and it's being replicated," said BCG Partners analyst Colin Gillis, pointing to up-and-coming competitors like LivingSocial.
In April, a source told Reuters that Groupon could raise as much as $1-billion in the IPO, which could value the fast-growing daily deals site at $15-billion to $20-billion.
Underwriters on the IPO are Morgan Stanley, Goldman Sachs and Credit Suisse.