Groupon revises IPO, to raise $540 million

Groupon, the world's largest online daily deals company, yesterday scaled back the size of its initial public offer (IPO) to $540 million, from the earlier proposed $750 million, due to instability in the equity markets and questions on the viability of its business model.

In a regulatory filing, the Chicago-based company said that it would sell 30 million shares of Class A common stock at an anticipated IPO price band between $16 and $18 per share.

An IPO at that price would value Groupon between $10.1 billion and $11.4 billion, which is less than half of what analysts, had earlier valued the company.

the daily deals company is planning to sell just under 5 per cent of its total outstanding shares after the offering and expects to net around $478.8 million from the IPO, using the midpoint figure of $17 per share.

It is said to have discussed a valuation as high as $25 billion in meetings with underwriters earlier this year.

Groupon, the brainchild of its current CEO Andrew Mason, had, in June filed documents to go public and raise up to $750 million, in one of the most closely watched (IPO) in recent years.

Now it may have opted to reduce the size of its IPO because equity markets have fallen and become a lot more volatile since June.