HOLY CRAP: Look At How Much Groupon Had To Pay Just To Go Public

groupon sec fees

This screenshot comes from Groupon’s amendment to its S-1, and it shows the enormous fees Groupon had to pay to go public.

The final tab was $5.7 million to the SEC, FINRA, NASDAQ, lawyers, accountants, and others.

That’s a lot of money, but it doesn’t even factor in the investment banking fee. The investment bankers take 7% of the IPO, or because its raising $700 million, in this case, $49 million.

Investment bankers get more than that, though. They get a secret money maker called the “green shoe,” which means they can buy an additional 15% of the 35 million shares (5.25 million) at $20, then sell into the market at wherever it trades. 

If the stock trades at, say, $30, and the banks dump the whole over-allotment option at the level, they will make an additional $50 million.

That’s more money out of Groupon’s pocket and into the investment banks’. It’s just awesome to be a banker!

NOW WATCH: Tech Insider videos

Want to read a more in-depth view on the trends influencing Australian business and the global economy? BI / Research is designed to help executives and industry leaders understand the major challenges and opportunities for industry, technology, strategy and the economy in the future. Sign up for free at research.businessinsider.com.au.

Tagged In

groupon ipos sai-us