March 3, 2021

DealBook: Groupon Weighs Delay to I.P.O.

Groupon headquarters in Chicago.Tim Boyle/Bloomberg NewsGroupon headquarters in Chicago.

Groupon is considering pushing back its long-awaited initial public offering amid the ongoing market volatility, two people briefed on the matter told DealBook on Tuesday.

While the online coupon giant had been hoping to go public by the end of this month, it is studying the market conditions and may push the timing of the offering back, the people said. While it had been considering holding a roadshow for investors next week, that is likely off the table for now.

Few companies would consider braving choppy stock markets to go public, even those with I.P.O.’s as eagerly awaited as Groupon. Its offering was one of the most anticipated of the fall, the latest in a line of new Web giants that have sought a stock market listing.

Another issue that Groupon will likely have to address is an internal memorandum from its chief executive, Andrew Mason, that quickly found its way into the public sphere. The memo, which promoted the company’s growth and strength against rivals, raised concerns about whether the company had violated the mandatory “quiet period” that applies to companies waiting to go public.

As it has with other companies, the Securities and Exchange Commission has been reviewing Groupon’s prospectus. One possible outcome is that Groupon will need to again amend its I.P.O. filing to include the memo from Mr. Mason and provide additional data to back up his assertions.

This would not be the first time Mr. Mason’s team has tangled with regulators. In August the daily deal site dropped a controversial accounting metric, called “adjusted consolidated segment operating income,” or A.C.S.O.I., after pushback from the Securities and Exchange Commission.

Representatives for Groupon and the S.E.C. declined to comment.

Started less than three years ago, Groupon has emerged as one of the fastest rising start-ups in the technology sector. The company’s valuation has soared in the past year, turbo-charged by increasing sales and early takeover interest from technology giants, like Google and Yahoo. It recorded $878 million in net revenue for the second quarter — a 36 percent increase from the previous quarter.

But the site, the largest of its kind, has drawn sharp criticism from retailers and analysts who question its ability to reduce its marketing expenses and sustain its growth rate. It has also confronted some setbacks abroad, most notably in China, where it is facing stiff competition from a swarm domestic players. Yet despite its challenges, Groupon is expected to be one of the largest public offerings in technology this year. Before credit fears roiled equity markets in August, Groupon’s team was eying an I.P.O. at a valuation near $30 billion, according to people familiar with the matter.

News of Groupon’s deliberations was reported earlier by The Wall Street Journal online.

Evelyn M. Rusli contributed reporting.

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