A Coupon For The Groupon IPO

What could be better than daily deal coupon issuer Groupon giving a rebate on itself?  Back in June, we posted on the absurd $15-20 billion valuation range  being suggested  for Groupon. Many investment bankers are probably poker wizards with the requisite "poker face," which allows them to make the most ridiculous statements without blushing or bursting out laughing.

In today's Wall Street Journal, we see that investors can get a coupon on Groupon:

"In a stark comedown for what was expected to be one of the hottest stock offerings of the year, Groupon Inc. is scaling back plans for its public debut. The Chicago company and its bankers will begin meeting with investors in the next few days to sell them on a deal that values the daily deals pioneer at less than $12 billion, according to people familiar with the matter. While that would still mark one of the biggest Internet IPOs since Google Inc. in 2004, it is well below the valuations that were bandied about when the company filed to go public in June. Groupon's IPO was originally expected to value the three-year-old company at between $15 billion and $20 billion, according to people familiar with the matter"

In the meantime, we've had IPO metrics blessed by the company and its auditors, and then the same metrics were withdrawn.  An email from the CEO suggests that investors should ignore marketing costs because they can be scaled back at any time, which could sound like "managing earnings," assuming that Groupon had earnings.

With the powerhouse banks behind the deal, a deal will get done.  Lucky flippers will have a nice payday.  The Groupon model is not healthy for most restaurant businesses, but if this industry manages to get a footing, then it will take its profits out of the hides of their small business customers.  In the meantime, I can't wait to see which mutual funds wind up listing Groupon as 2% of their fund assets. An absurd valuation is now merely ridiculous. Caveat emptor!