Fund Manager: Interest In Groupon IPO "Is Diminishing By The Week"

Andrew MasonAndrew Mason

Photo: Wikimedia Commons

It feels like piling on at this point, but Bloomberg has an article claiming that Groupon’s IPO valuation could drop to $3-$5 billion, down from the $25 billion it was expecting.We’re sceptical. Groupon and its bankers would just pull the IPO if that was the case.

Our own assessment pegged Groupon’s current value at $10 billion, which is still a far cry from the $25 billion the company was formerly expecting.

Bloomberg’s article is based on the following. You tell us if you agree:

Groupon Inc., the largest online- coupon site, may have to settle for a smaller initial public offering as management gaffes, restated results and regulatory scrutiny leave investors leery of owning the stock.

The valuation might need to drop to as low as $3 billion to $5 billion to entice shareholders, said Josef Schuster, founder of IPOX Schuster LLC, which invests in IPOs …

“Interest is diminishing by the week,” said Schuster, who manages $2.5 billion in assets for the Chicago-based fund. “All the news that’s coming out underlines some form of turmoil in the company. As an IPO investor, you don’t want that.”

More at Bloomberg >

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