Groupon Files $750 Million IPO
Here is the key data from the Morgan Stanley (lead Underwriter), Goldman Sachs and Credit Suisse-led IPO:
- Q1 Revenue: $644 million, up from $44 million a year prior
- Q1 Gross Profit: $270 million, 41.9% margin, up from $20 million a year prior, and down from the margin of 45.5%
- Q1 Loss from operations: ($117) million compared to $8.5 million profit a year earlier.
- Q1 subscribers: 83.1 million, up from 3.4 million
- Q1 cash flow: $6.978 million down from $12.0 million a year earlier
- Cumulative customers: 15.8 million, up from 874K
- Featured merchants 56.781 up from 2,903
- Groupons sold: 28 million compared to 1.76 million
- Cash balance: $208.7 million; Working capital deficit: ($228.7) million
- Total Assets: $541.4 million, Total Liabilities: $14.8 million
- Total shares outstanding: 296,140,145
- 37.2% of GRPN sales came from outside of the US in 2010
- Since inception GRPN has raised $1.1 billion from sales of common and preferred stock
- The company had 7,107 employees at March 31, up from 37 on June 30, 2009
- Andrew Mason's annual base salary is $575 as of January 1, 2011
- The firm's former President and COO Robert Solomon, left the company on March 22, 2011, its former CTO Kenneth Pelletier, left GRPN on March 23, 2011.
- Curiously, the company raised it raised $135 million at $32.12/share in its Series E round in April 2010, while in a subsequent Series G private round in December 2010, it raised $946 million, at $31.59 per share. Downround?
Use of Proceeds: "We intend to use the net proceeds to us from this offering for working capital and other general corporate purposes, which may include the acquisition of other businesses, products or technologies; however, we do not have any commitments for any acquisitions at this time. We will have broad discretion in the way we use the net proceeds. Pending use of the net proceeds as described above, we intend to invest the net proceeds in money market funds and investment grade debt securities. "
GRPN believes with the cash from the IPO, it should have enough money to last it 12 months: "Although we can provide no assurances, we believe that the net proceeds from this offering, together with our available cash and cash equivalents balance and cash generated from operations, should be sufficient to meet our working capital requirements and other capital expenditures for the next twelve months."
An amusing risk factor:
If securities analysts do not
publish research or if securities analysts or other third parties
publish inaccurate or unfavorable research about us, the price of our
Class A common stock could decline.
The trading market
for our Class A common stock will rely in part on the research and
reports that securities analysts and other third parties choose to
publish about us. We do not control these analysts or other third
parties. The price of our Class A common stock could decline if one or
more securities analysts downgrade our Class A common stock or if one or
more securities analysts or other third parties publish inaccurate or
unfavorable research about us or cease publishing reports about us.
And from the Legal Procedings:
The Company currently is involved in several disputes or regulatory inquiries, including suits by its customers (individually or as class actions) alleging, among other things, violation of the Credit Card Accountability, Responsibility and Disclosure Act and state laws governing gift cards, stored value cards and coupons, violations of unclaimed and abandoned property laws and violations of privacy laws. The number of these disputes and inquiries is increasing. Any claims or regulatory actions against the Company, whether meritorious or not, could be time consuming, result in costly litigation, damage awards, injunctive relief or increased costs of doing business through adverse judgment or settlement, require the Company to change its business practices in expensive ways, require significant amounts of management time, result in the diversion of significant operational resources or otherwise harm the Company's business.
In addition, third parties have from time to time claimed, and others may claim in the future, that the Company has infringed their intellectual property rights. The Company is subject to intellectual property disputes, and expects that it will increasingly be subject to intellectual property infringement claims as its services expand in scope and complexity. The Company has in the past been forced to litigate such claims. The Company may also become more vulnerable to third-party claims as laws such as the Digital Millennium Copyright Act are interpreted by the courts, and as the Company becomes subject to laws in jurisdictions where the underlying laws with respect to the potential liability of online intermediaries are either unclear or less favorable. The Company believes that additional lawsuits alleging that it has violated patent, copyright or trademark laws will be filed against it. Intellectual property claims, whether meritorious or not, are time consuming and costly to resolve, could require expensive changes in the Company's methods of doing business, or could require it to enter into costly royalty or licensing agreements.
From time to time, the Company may become party to additional litigation incident to the ordinary course of business. The Company assesses the likelihood of any adverse judgments or outcomes with respect to these matters and determines loss contingency assessments on a gross basis after assessing the probability of incurrence of a loss and whether a loss is reasonably estimable. In addition, the Company considers other relevant factors that could impact its ability to reasonably estimate a loss. A determination of the amount of reserves required, if any, for these contingencies is made after analyzing each matter. The Company's reserves may change in the future due to new developments or changes in strategy in handling these matters. Although the results of litigation and claims cannot be predicted with certainty, the Company currently believes that the final outcome of these matters will not have a material adverse effect on its business, consolidated financial position, results of operations, or cash flows. Regardless of the outcome, litigation can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors.
Full filing can be found here.
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