Groupon is going after what seems to be a hot market right now. They are going to have an IPO very soon. After seeing how much a non market leader like LinkedIn could do with an IPO; it was only a matter of time before Groupon jumped at this chance. LinkedIn had a great IPO, though many feel the price was inflated unnecessarily by media hype. Groupon’s IPO will be underwritten by Morgan Stanley, Credit Suisse and Goldman Sachs.
What those that trade stocks like most about companies that file with the SEC is that all their private financials become public. For the full year of 2010, the Groupon’s revenue totaled $713 million. That is up 23x from 2009. If you are wondering if Groupon will continue to grow fast. Wonder no more, In just the first quarter of 2011 the company had a revenue of $644 million.
Groupon’s subscriber base is also growing. They had over 83 million subscribers at the end of the first quarter. That is up 50 million from from 2010. This is one of those stocks that will get a lot of hype but is well deserved because it has the business to back it up. The company raised over $1 billion in venture capital and was able to snub tech giant Google. Google made an offer to buy the company last year. They were turned down flat.
As great an investment as Groupon sounds. There are some concerns. The company has yet to turn a profit and does not expect to be profitable in the near future. Groupon had net losses of $389.6 million in 2010 and $102.7 million in the first quarter of 2011. Despite it’s net income lost, Groupon is still a great investment because it is the clear leader in a very young growing market.
Groupon’s CEO Andrew Mason said a few words in the filling about Groupon’s strategy:
” If you’re thinking about investing, hopefully it’s because, like me, you believe that Groupon is better positioned than any company in history to reshape local commerce. The speed of our growth reflects the enormous opportunity before us to create a more efficient local marketplace. As with any business in a 30-month-old industry, the path to success will have twists and turns, moments of brilliance and other moments of sheer stupidity.”