Gropuon Considers Raising Public Offering Price

Groupon Inc. has mulled increasing its IPO price, as the demand is expected to increase with the completion of East Coast leg, a two week road show to persuade investors to invest in the daily deals site.

Among the most anticipated initial public offerings of this year, Groupon Inc in the past had filed to sell 30 million stocks at $16 to $18 per share price, considering the reduced anticipation in the weak markets and worries over the company’s long term industry view. However the daily deals site is considering to increase the price of its IPO since the daily deals site is looking for a more aggressive growth.

Raising the price of the stocks are being taken into consideration by the daily deals site  and by early next week could file a revised IPO prospectus, said a source with direct knowledge of the subject. The Groupon spokesperson refused to comment.

Andrew Mason, Chief Executive of Groupon, on Friday hosted a luncheon at the St Regis hotel in Manhattan. The meeting was seen as the biggest event on the road show and vital in facilitating the company’s bankers on deciding the pricing of shares.

The fund managers who attended the meeting said that they were amiably surprised by how composed and charming Mason was, since he had a volatile reputation as a result of a leaked staff memo in which he blasted the company’s critics. A money manager at a firm, who took part in the Friday meeting said Mason was less arrogant in person than he had expected.

Nevertheless, some of the investors said that they were in quite a dilemma about buying into the company’s stocks, because of the threat that the daily deals site is facing competition from numerous websites in the daily deals business. Groupon had also been asked to change its accounting twice by the regulators in the past one year and has lost two Chief Operating Officers since the beginning of 2010.

Despite protracted concerns, the initial public offerings to be over-subscribed are expected by the investors, partly because bankers have been limited to just 4.7% of shares. Another investor who attended the meeting said the investor’s hedge fund group planned on demanding for shares in the offer, however added the allocation was very unlikely to happen.

According to two sources, Capital Group, T Row Price and Fidelity investments already own Groupon shares from previous private investment rounds and have further plans on buying more stocks in the upcoming IPO.  All the three asset managers refused to comment hence it was unclear whether they would follow through with their plans.

Gropuon’s IPO was scaled back to be raised up to $540 million, from a planned target of up to $750 billion. Groupon faces competition from well funded rivals such as Amazon.com (NASDAQ:AMZN) Inc and Google Inc. (NASDAQ:GOOG), the latter also tried to acquire the by bidding for it.

Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.