After a long wait and a good deal of uncertainty the biggest initial public offering of the season has finally settled on a date. Daily deals website Groupon announced on Friday, October 21, that it plans to conduct its IPO early next month on Thursday, November 3, according to Reuters.
Groupons long trek toward its IPO began June, when it made its first filing with the Securities and Exchange Commission. Controversy emerged almost immediately, with many criticizing its use of a non-standard accounting metric known as adjusted consolidated segment operating income, which amortizes costs for attracting and adding new customers.
Given that this includes the majority of Groupon’s spending, the rosy picture that initial filing painted changed substantially with the adoption of more conventional accounting practices. In September, another accounting change cut Groupon’s revenue nearly in half, when the company admitted it had mistakenly counted all money taken in as revenue if it was immediately sent out to participating businesses, according to The New York Times.
The company’s business model has also come under assault, with many critics noting that the business has yet to turn a profit after three years in operation. Earlier this month, the company acknowledged its issues in this regard, suggesting it would reduce its spending on advertising because of what it saw as market saturation in many areas, according to The Chicago Tribune.
The company made other missteps as well, with AllThingsD reporting that Groupon co-founder and chief executive officer Andrew Mason might have broken Securities and Exchange Commission rules in emailing employees about the upcoming IPO.
With the turbulent path the company took on its way to going public, The Los Angeles Times reports that the company has scaled back its expectations for the offering. After initially announcing expectations that it would bring in as much $1 billion with its IPO, Groupon released revised estimates of between $480 million and $540 million.
The company plans to price its shares somewhere between $16 and $18 each, valuing the company at around $9.6 billion to $10.8 billion. This marks a dramatic fall from initial valuations reaching as high as $30 billion, though the Times notes it is still far more than the $6 billion Google offered to buy the company.
With 14 banks underwriting the deal, optimism remains the deal could be conducted successfully.