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Federal scrutiny could stymie Groupon IPO

July 27, 2011 |  6:33 pm


Groupon's $750-million initial public offering might have to be delayed until late September because of questions from federal regulators over the financial data the group-buying coupon website has provided so far, according to a report from CNBC.

Groupon detailed a bit of its IPO plans in a June filing with the Securities and Exchange Commission and in the documents said, among other things, that its IPO would be made up of both new shares and shares belonging to current investors.

On Wednesday, "unnamed people" familiar with the SEC's standard review of the company's filings were "reporting that the process may take longer than usual for Groupon due to 'nonstandard financial measures' the daily coupon company used," CNBC said.

However, the financial news cable network also said that an analyst it spoke with said a September IPO wouldn't be abnormal as the SEC usually takes about 3 months to review such documents before a company issues public stock for the first time.

CNBC said that one of the accounting metrics it has been told the SEC is taking an extra look at is Groupon's gross profit.

"Used as a gauge of revenue, this is the amount Groupon keeps after giving a portion of each sale to its merchant partners," CNBC said. "But the figure excludes marketing and administrative costs, raising questions about its usefulness."

Officials from Groupon were unavailable for comment on Wednesday.


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Photo: The Groupon logo is displayed on the company's website in Chicago on June 2, 2011. Credit: Scott Olson /Getty Images