Groupon (NASDAQ:GRPN) started trading on Friday, after its IPO established a share price 40% above the offering price.
Groupon’s first public trade was at US$28.33, up US$8.33 from it’s initial value of US$20 per share. Shares in the company were expected to be priced in the range of US$16 to US$18 per share.
Groupon’s IPO increased to 35m shares, 5m more than the 30m shares it originally planned to release, yet represents only 5% of the company. The company’s share price values Groupon at US$12.7bn, making it the second largest internet company, in terms of valuation at IPO. The value of Google (NASDAQ:GOOG) was US$23.1bn in after its IPO in 2004.
Some analysts say Groupon’s high valuation is a result of the relatively small number of shares that it has made available.
Groupon reported US$1.12bn in revenue and a loss of US$308.1m for the first nine months of the year. The average revenue per sold Groupon is US$11.90, with over 93m Groupons sold during the first nine months of the year. About 16m people have bought more than one Groupon since the company’s inception in November 2008.
Groupon, trading at US$28.02 on a volume of 36.1m, may encounter significant competition from rivals that include Google Offers.