Groupon: The Best of IPOs, the Worst of IPOs
Groupon, the daily-deal site and purveyor of half-off sushi and mani-pedis went public on Nov. 4. The Chicago-based company’s shares gained 31 percent on IPO day, then dropped 8 percent over the next three trading days, adding fuel to a long-raging debate: Is Groupon’s IPO a harbinger of a new golden era of e-commerce—or a bubble that’s ready to burst? Below, chatter from the Valley, Wall Street, and the Windy City.
Founder, Chairman, and CEO of TIBCO Software
This is the largest creation of wealth in the shortest period of time in human history: Over $10 billion in three years. They have hired 10,000 people, helped 250,000 small businesses who in turn have had to hire more people as well. In fact, they have done more for unemployment and the economy than Congress and the Administration combined. So people get jobs, small business gets revenue plus new customers, and investors have seen incredible value—sounds like a win-win-win. We should be applauding American ingenuity.
CEO of cloud storage startupBox.net
There was a collective sigh of relief in the Valley among startups, investors, and bankers, as this will open the gates to more IPOs that were “on hold” until Groupon tested the waters.
Portfolio Manager at SiVest Group
The Groupon IPO looks like so far, so good. That’s good for everyone else. Now word leaks out that our friends at Yelp are doing their banking beauty contest.
Founder of Class V Group, an IPO advisory firm
The company’s banks were able to successfully place the shares offered, but the ultimate success of this company as a public entity will now totally depend on how management deploys the new cash in an effort to build a sustainable business. At the very least, the warm reception for this IPO, in light of the not insignificant questions both about management and business model, suggests investor optimism is alive and well.
CEO of Groupon competitor Bloomspot
The question for this IPO is, Is this an endorsement of their model or just an endorsement of the space? The general skepticism about the model, the way it’s defined today, remains. I don’t think that’s been shaken off.
Chief Investment Officer,Victory Capital Management
If they actually succeed, there’ll be plenty of time to get in.
CEO of SCVNGR, a Groupon competitor
The story isn’t over yet, but I think the fundamental lesson is twofold. First, entrepreneurs need to focus on building a business that provides real, trackable value to everyone your business touches. If you don’t, when the time comes that you’re put in a very public place, there’ll be far too many people waiting in the woodwork to tear you down.
Second, don’t mess with the SEC. No internal “leaked” memos to employees or funny accounting practices. I think [Groupon’s] two shennanigans cost them about $5 billion apiece.
President of online retailer Gilt Groupe
The market has rewarded Groupon for being the mass-market leader in the daily-deal space. It may take time to grow into the current valuation, but Groupon clearly has the capital and brand recognition.
Richard M. Daley
Former Mayor of Chicago
We were never identified as a tech city. We’ve identified the city as acity with tech people, creative people, risk-takers, and it’s changed the whole image.
Visiting Scholar at University of California at Berkeley and Executive in Residence at Duke University
Groupon isn’t a tech company. It is a low-tech Yellow Pages-like business. Its investors like Marc Andreessen are doing the tech industry a big disservice by positioning it as a software play.
Chief Investment Officer, Chicago-based Harris Private Bank
For individual investors, it’s hard to justify buying. You’re buying it at what could be a very elevated valuation.
CEO of StockTwits, an online investing community
This is not Demand Media or Pandora. This is an important IPO because Groupon is a platform.
Whether it works or not is up to Groupon at this point, not short-sellers. Groupon threatened, inspired, and created a new way to think about local and Web. It’s far from perfect and obviously could implode, but it deserved a chance to be public. It feels less engineered as an IPO than recent ones.
Managing Director at venture capital firm Foundry Group
Groupon went public?