Brendan Mcdermid/ReutersAndrew Mason, chief of Groupon, with his fiancee, Jenny Gillespie, a pop musician.
Groupon — an Internet darling with no profits but plenty of momentum — stunned Wall Street on Friday with a premiere that echoed the dot-com boom.
After it started trading on the Nasdaq market around 10:45 a.m., the three-year-old daily deals site, which sold its shares at $20, promptly soared 40 percent to open at $28, continuing to climb to more than $30. At that latest price, Groupon is valued at nearly $19 billion.
The dearth of shares helped buffer the price. The company sold just 35 million shares in the initial public offering, roughly 5 percent of the total. The underwriters also have the option to sell an additional 4.5 million shares.
The $700 million offering — the second largest for a technology company this year — did not eclipse the 1995 I.P.O. of the web browser Netscape, the offering that launched a thousand I.P.O.’s. But the pop was enough to quiet the fears of technology investors who have recently wondered whether the I.P.O. market was open at all. Demand for Groupon’s shares was so high, that orders were more than 10 times the amount of the shares offered, according to several people with knowledge of the matter.
“Groupon’s I.P.O. certainly helps the U.S. market for technology offerings,” Josef Schuster, a money manager at IPOX Schuster, “It indicates that people are willing to take risk again.”
Many investors are already looking ahead, eager to see if the valuations will stick and other technology start-ups will find the public markets equally hospitable.
The gaming company Zynga filed to go public back in July and is expected to start trading by the end of this year. LinkedIn, which had a successful debut in May, with shares more doubling on the first day of trading, will also test the market’s appetite by selling even more shares. Late Thursday, the professional social network said it was planning to offer up to $500 million in additional shares.
The latest batch of I.P.O.’s are expected to pale next to the highly anticipated I.P.O. of Facebook. The world’s largest social network is widely expected to go public sometime next year at a valuation of $80 billion or more.
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