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Groupon’s Stumbles May Force Company to Pare Back Size of IPO

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. That’s a fraction of $25 billion that was said to be discussed as a potential valuation when Groupon met with underwriters earlier this year. It’s also below the $6 billion Google Inc. offered last year.