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Category: IPOs

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Facebook may do an IPO in the second quarter

Facebook
Facebook Inc. may be closing in on an initial public stock offering.

The granddaddy of social-media companies is considering an IPO sometime in the second quarter of next year, although the exact timing has not yet been determined, the Wall Street Journal reported.

The company reportedly is contemplating a $10-billion offering that would value the company at $100 billion.

Investors have anxiously awaited a chance to buy into the fast-growing technology goliath following a string of IPOs this year from smaller social-media companies.

The timing of Facebook's IPO is likely to hinge in part on the condition of the stock market, which has not been kind lately to some other prominent tech IPOs.

In a major disappointment, shares of one of this year's most closely watched IPOs, online-coupon company Groupon Inc., have plunged recently. The stock closed Monday at $15.24, far below the $20 price at which it sold shares to investors earlier this month.

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Groupon IPO: highest tech valuation since Google

-- Walter Hamilton

Photo credit: Facebook

Groupon shares skid again

Groupon-TimBoyle-Bloomberg
Maybe Groupon Inc. needs a groupon for its own stock.

Shares of the daily-deals website sank again Wednesday, skidding below the price of the company's much-hyped initial public offering earlier this month. As of 11:45 a.m. PST, Groupon shares fell $2.80, or 14%, to $17.27. The IPO price was $20.

Shares of Groupon have turned ice cold just as the holiday shopping season has heated up this week. The stock plummeted 10% Monday and another 15% Tuesday.

There's been no hard news to explain the sell-off, though there are plenty of theories, including investor concerns about competition in the online-coupon industry and intensifying economic threats in Europe that would dent Groupon's international business.

Whatever the cause, it's a lightning-quick change of fortune for such a prominent IPO.

Groupon shares surged 31% in their first day of trading on Nov. 4. That raised enthusiasm for other highly anticipated technology IPOs, including Zynga Inc.

But in the 13 trading days since the IPO, Groupon shares have risen only three times.

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Did investors get a deal or a dud?

Groupon shares rise 31% in first day of trading

Groupon IPO: highest tech valuation since Google

-- Walter Hamilton and Tom Petruno

Photos: Entrance to Groupon's headquarters in Chicago. The company's stock has dropped since its IPO earlier this month. Credit: Tim Boyle / Bloomberg

Yelp hires Goldman Sachs and Citigroup to lead IPO

Yelp]

Online review site Yelp Inc. is moving closer to an initial public offering, hiring Goldman Sachs Group Inc. and Citigroup Inc. of head up the effort, according to reports Tuesday.

The San Francisco service would follow the path of Groupon Inc., which raised more than $700 million in its offering last week, according to people briefed on the situation and quoted by the New York Times.

Yelp launched in 2004 and had 63 million visitors in August reading more than 22 million local reviews. The company makes money by selling ads to neighborhood businesses.

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Groupon IPO: highest tech valuation since Google

-- Tiffany Hsu

Photo: Kathy Willens / Associated Press

Groupon IPO: Did investors get a deal or a dud?

Groupon
Some relevant numbers in the wake of daily-deals purveyor Groupon Inc.’s initial public stock offering, which began trading on Friday:

--- Deal size: The Chicago company sold 35 million shares at $20 each, raising $700 million. It was the largest IPO for a U.S. Internet-related firm since Google Inc. raised $1.66 billion in August 2004.

But some foreign Net-related companies have raised more than Groupon recently. Russian search engine Yandex raised $1.3 billion in its IPO in May.

--- First-day pop: Groupon stock finished its first day of trading at $26.11, for a gain of nearly 31%. It traded as high as $31.14 shortly after the session opened as buyers rushed in. They should have waited: Within an hour of the peak price the stock fell as low as $25.90.

The first-day price gain was relatively modest compared with some other Net-related IPOs this year. LinkedIn surged 109% on its first day, Zillow jumped 79% and Yandex rose 55%. But another way to look at those gains is that the companies’ underwriters priced the shares too low in the IPOs.

--- Flippers: Did a lot of the buyers in the Groupon IPO immediately flip the stock? Looks that way: 49.8 million shares traded for the day on Nasdaq, or 142% of the shares offered. Of course, some shares undoubtedly changed hands multiple times during the session.

--- Market value: The company ended the day with a market value of $16.65 billion. That’s the value of the 35 million shares that were sold and the 600 million shares that are still in the hands of insiders and other early Groupon investors.

At $16.65 billion, three-year-old Groupon is worth more than a lot of established companies across the business spectrum, including semiconductor-equipment maker Applied Materials ($16.4 billion), grocer Whole Foods Market ($12.2 billion) and retailer Nordstrom ($10.7 billion).

Groupon is far smaller than Internet titans such as Google ($193 billion), Amazon.com ($98.4 billion) and EBay ($42.2 billion). But it has more than twice the valuation of LinkedIn ($7.9 billion) and about 14 times the valuation of online job-search firm Monster Worldwide ($1.2 billion).

--- Revenue and losses: Groupon’s quarterly sales have rocketed from just $4 million in the third quarter of 2009 to $420 million in the quarter just ended. But as investors hopefully know, Groupon still hasn’t turned a profit. (Read the company's prospectus here.)

In the first nine months of this year the company lost $215 million, or about 34 cents a share, on revenue of $1.1 billion. Groupon has to spend a lot to market itself to the merchants who use its daily-deals service. Marketing costs alone were $613 million in the first nine months.

--- When will profits come? As Karl Denninger writes on SeekingAlpha, that will depend on whether merchants keep coming back to Groupon. And the only way they’ll keep coming back is if their Groupon customers come back to pay full price rather than the deep-discount price.

Remember: The Net-based daily-deals idea that Groupon has popularized is a young concept. The revenue so far is huge, but that won’t help Groupon's stock if investors see little hope of achieving and sustaining strong profitability.

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-- Tom Petruno

twitter.com/tpetruno

Photo: Groupon Chief Executive Andrew Mason (wearing the blue tie) jokes around with Groupon's largest shareholder and chairman, Eric Lefkofsky, outside the Nasdaq Market in New York, where the company's stock began trading on Friday. Credit: Brendan McDermid / Reuters

Groupon shares rise 31% in first day of trading

Groupon-TimBoyle-Bloomberg
The initial public offering of daily-deals site Groupon Inc. was a good deal for some of its investors.

Groupon shares jumped in their eagerly awaited stock-market debut Friday, rising almost 31% from their IPO price. But the stock closed below the $28 level at which trading opened and the $31.14 high of the day.

That meant big profits for professional investors who were lucky enough to get in early, but immediate losses of as much as 16% for many smaller investors who bought in during much of the day.

“It’s successful for the insiders, including the investment bankers, the company and the flippers” who sold at a quick profit, said Francis Gaskins of IPOdesktop.com in Marina del Rey. “The outsiders will probably get burned.”

Nevertheless, Groupon’s offering is likely to be viewed as success overall, thus setting the stage for a host of other offerings in coming months, including those expected from social-media behemoths Zynga Inc. and Facebook Inc.

“It’s really an astonishing first-day opening considering all the criticism it’s endured over the past couple of months,” said Lee Simmons, an IPO researcher at Dun & Bradstreet. “This signals that there’s really pent-up demand for these types of stocks.”

The stock, which was priced Thursday night at $20, closed at $26.11. Groupon raised $700 million in the offering, which valued the company at $12.7 billion. The stock trades on the Nasdaq Stock Market under the ticker symbol “GRPN.”

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Groupon prices IPO at $20 a share

LinkedIn third-quarter loss disappoints investors

-- Walter Hamilton

Photo: The entrance to Groupon's headquarters in Chicago. Credit: Tim Boyle/Bloomberg

Groupon IPO: Shares surge on first day of trading

6a00d8341c630a53ef0162fc1fbe67970d-600wi
Investors clamored for a piece of Groupon Inc. on its first morning as a public company, sending shares of the online coupon company up nearly 50%.

In the early hours of trading on the Nasdaq exchange Friday, shares of Groupon were up 43%, or $8.50 from its $20 initial public offering late Thursday.

The gains came even as the rest of the stock market was falling. The technology heavy Nasdaq composite index was recently down 1.5%, or 39.50 points to 2,658.47.

The $20 IPO was already above the $16 to $18 range that had been expected, and it signaled strong investor demand for the company.

Groupon, which is trading under the ticker symbol "GRPN," had stumbled on its way to the starting gate this summer, revising its public documents and confronting skepticism about its business model.

But the offering remained one of the most hotly anticipated this year -- and one of the largest. The company helped pump up demand by selling only a small portion of its shares. 

Early demand for Internet startups have not always withstood the test of time. Earlier this year, LinkedIn shares skyrocketed in their first days of trading before falling back to earth.

RELATED:

Groupon prices IPO at $20 a share

LinkedIn third-quarter loss disappoints investors

-- Nathaniel Popper

twitter.com/nathanielpopper

Photo:  Charles Rex Arbogast / Associated Press

Groupon prices IPO at $20 a share

Groupon
Groupon’s highly anticipated initial public offering has been priced at $20 a share.

That leaves the Chicago company, which offers daily localized deals, valued at about $12.7 billion. The price is higher than the expected range of $16 to $18 a share.

Groupon sold 35 million shares in the offering, raising $700 million. The size of the deal was increased from an expected 30 million shares.

The stock will begin trading Friday on the Nasdaq Stock Market under the ticker symbol "GRPN."

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Groupon stumps for and tries to protect its IPO

Groupon said to close IPO orders early on demand for shares

-- Tiffany Hsu

Photo: AP Photo / Charles Rex Arbogast

Groupon stumps for and tries to protect its IPO

Groupon
Groupon is still on top of its competitors, but to stay there, it’ll have to cut out the bottom 10% of its staff, Chief Executive Andrew Mason said this week.

In Boston for a nationwide roadshow seeking investors for its upcoming initial public offering, Mason assured portfolio managers that his company was sound, according to Reuters.

Groupon, which offers daily coupons for local as well as major businesses, features unique technology and an innovative mindset, Mason said.

And to score deeper discounts from merchants, the company will shave off the worst-performing 10% of its 4,800-person-strong sales staff and replace them with new hires.

The company, which has yet to turn a net profit, is expected to price its IPO on Nov. 3, after the roadshow works its way through Chicago, Denver, New York and San Francisco.

Groupon’s IPO has been plagued by false starts, including valuation expectations that have been more than halved from a June high of $25 billion. Competition is rampant, with LivingSocial and a growing gang of emerging sites stealing away subscribers and merchant partners.

Groupon seems to be on edge, sending its lawyers recently after a parody website that mocks the IPO, according to the Wall Street Journal.

On a landing page that resembles Groupon’s site, online retailer Cat5Commerce is pretending to sell the IPO, which it jokes is now available for a “bargain basement price.”

In an irreverent description, Cat5Commerce writes: “Owning a piece of what Forbes deemed "the fastest growing company ever" will be akin to governing a province in the Roman Empire. People on the street? They'll know your name. People in buildings? They'll probably know it too. C'mon. Make Warren Buffett look like a chump today.”

Also for sale: The Pets.com sock puppet for $10 and the MySpace logo for one cent.

Groupon has demanded that the site, which notes that it is “a digital parody meant to provide satirical commentary,” be taken down.

RELATED:

Groupon files for IPO as high as $750 million

Groupon scales back IPO, expects to raise up to $540 million

-- Tiffany Hsu

Photo: Charles Rex Arbogast / Associated Press

Wall Street: Dow up, gold down, Citigroup-SEC talks, rogue trader

Wall Street
  

Gold: Trading at $1,790.50, down $36. Dow Jones industrial average: Up 72.58 points to 11,319.31.

Citigroup talks. The Securities and Exchange Commission reportedly is negotiating with Citigroup Inc. on a potential settlement calling for the bank to pay more than $200 million for questionable mortgage-bond deals.

Rogue trader. Investment bank UBS warned that an employee's unauthorized trading could cost it more than $2 billion.

Groupon IPO. The daily deals site is proceeding with its delayed initial public offering, which now may take place in late October or early November.

Solyndra battle. Washington lawmakers are fighting an increasingly heated battle over the Fremont, Calif., solar equipment maker that failed after getting a federal loan.



-- Walter Hamilton

Photo: On Wall Street. Credit: Stan Honda / Getty Images

Groupon, Zynga reportedly delay IPOs

Groupon 

ZyngaInvestors may have to wait a bit longer to buy into Groupon Inc. and Zynga Inc.

The Internet darlings reportedly are delaying their initial public offerings amid the turbulence in the stock market.

Groupon and Zynga were seen as the eventual exclamation points on this year's IPO boomlet of Internet-related companies, especially social-media newcomers. But companies in a number of industries have canceled their offerings at a rapid pace over the last month as investors look askance at investments seen as risky.

Groupon, which offers daily deals over the Internet, is postponing its offering, according to Bloomberg News. Meanwhile, online gaming site Zynga may delay its IPO until early next year, CNBC reported.

Despite the jittery market, at least one company is moving forward with a hoped-for stock offering, though it would be months before its actual debut.

Private-equity firm Carlyle Group filed Tuesday for an IPO, following in the footsteps of rivals Blackstone Group and Apollo Global Management.

Not that investors should get too excited. For all their supposed Wall Street acumen, Carlyle’s private-equity brethren have been notoriously poor performers.

Blackstone sank soon after going public at $31 in June 2007, and has never neared its IPO price. It closed Tuesday at $12.50.

Apollo Global Management has slumped to $12.19 from the $19 at which it went public in March. And Fortress Investment Group, which debuted at $18.50 in early 2007, trades at $3.14 today.

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-- Walter Hamilton

Century City aircraft leasing firm files for public offering

ILFC

Century City-based aircraft leasing company International Lease Finance Corp. unveiled plans for an initial public offering, a move that would take the firm out from under the wing of parent company American International Group Inc.

In a filing with the Securities and Exchange Commission on Thursday, the leasing company known as ILFC said that “AIG has determined that ILFC is not one of its core businesses.”

AIG, the beleagured New York-based insurance corporation that received $182.5 billion in bailout money during the global financial crisis, said it would initially sell 20% of the leasing company and divest most of the unit over time.

The filing did not disclose how many shares would be sold or estimate their price, nor did it say when the stock sale would take place.

It marks the beginning of the end of AIG’s 21-year ownership role over ILFC. AIG bought ILFC in 1990 for $1.3 billion in a stock swap.

But now AIG has been selling off business units in an attempt to pay back the federal government.

In the past, AIG has hinted at selling the aircraft leasing company, known as ILFC, but has been unable to close a deal.

For decades, ILFC has been an industry leader in aircraft leasing -- the business of buying planes and renting them to airlines. But the company fell on hard times when AIG nearly collapsed in 2008, which pinned both AIG and ILFC under government control and placed restrictions on the amount of money executives could make.

That confinement caused a mass exodus of ILFC's management team. The biggest blow came in February 2010 when company co-founder and then-Chief Executive Steven Udvar-Hazy abruptly left to start a rival business, Air Lease Corp., also based in Century City.

In May 2010, Henri Courpron, a former Airbus executive, was named CEO.

ILFC remains one of the world's largest aircraft leasing firms with a fleet of 933 aircraft. The company posted $2.2 billion in revenue in the six month period that ended June 30.

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Dogfight in plane leasing shapes up

International Lease Finance returns to buying passenger jets

-- W.J. Hennigan

Photo: ILFC Chief Executive Henri Courpron at the company's offices in Century City. Credit: Francine Orr/ Los Angeles Times

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