Amazon.com Inc. (AMZN), a backer of LivingSocial, said the daily-deal startup had more than $500 million in losses last year and pegged its stake at $208 million, implying the company’s book value is $671 million.
LivingSocial posted revenue of $245 million in 2011, with $686 million in operating expenses, according to a regulatory filing. Amazon said it owns a 31 percent stake in LivingSocial, the main competitor to Groupon Inc. in the online-coupon market.
The daily-deal site previously lined up $400 million in funding at a valuation of about $6 billion, a person with direct knowledge of the matter said in December. LivingSocial delivers discounts on restaurants, hotels, events, and other goods and services, a market that may generate $4.17 billion in U.S. sales in 2015, up from $1.97 billion last year, according to research firm BIA/Kelsey in Chantilly, Virginia.
Groupon shares dropped as much as 24 percent below its IPO price in November on concern that profit margins will be squeezed by surging marketing costs and competition from rivals. The stock is now trading at 7.5 percent more than its offering price.
Amazon, the world’s largest online retailer, invested $175 million in Washington, D.C.-based LivingSocial in December 2010. The company valued the stake at $192 million in the third quarter.
Mary Osako, a spokeswoman for Seattle-based Amazon, declined to comment beyond the information in the filing. Amazon’s shares fell 7.7 percent today after its sales missed analysts’ estimates.
To contact the editor responsible for this story: Tom Giles at firstname.lastname@example.org