Groupon unlikely to generate blockbuster IPO, experts say Startup company Groupon made waves when it announced it would forego buyout offers from companies as formidable as Google, opting instead to have an initial public offering (IPO). Analysts have increasingly turned their attention on the Chicago-based firm, but many argue it is neither financially sound nor potentially profitable.

Groupon, the group buying discount site, rose to fame last year as consumers rapidly signed up to participate in the daily deals offered by the website. Though it was initially flush with fanfare and praise from the business world, much of that early excitement has quickly turned to wariness.

Experts contend the company spends too much of its money – a majority of which was raised from venture capital funds – on marketing costs. What's more, they assert it has struggled to achieve business cost reductions, noting it lost $102.7 million in the last fiscal quarter on revenue of $878 million.

The New York Times reports many business analysts who were previously enamored with the company have subsequently moved to distance themselves from it. While some analysts said its IPO could have generated as much as $30 billion last year, it is now widely expected the company's long-delayed IPO will be worth less than $3 billion.

Share To:

Strategic Sourceror

Post A Comment:

0 comments so far,add yours