The initial public offering of daily-deals site Groupon Inc. was a good deal for some of its investors.
Groupon shares jumped in their eagerly awaited stock-market debut Friday, rising almost 31% from their IPO price. But the stock closed below the $28 level at which trading opened and the $31.14 high of the day.
That meant big profits for professional investors who were lucky enough to get in early, but immediate losses of as much as 16% for many smaller investors who bought in during much of the day.
“It’s successful for the insiders, including the investment bankers, the company and the flippers” who sold at a quick profit, said Francis Gaskins of IPOdesktop.com in Marina del Rey. “The outsiders will probably get burned.”
Nevertheless, Groupon’s offering is likely to be viewed as success overall, thus setting the stage for a host of other offerings in coming months, including those expected from social-media behemoths Zynga Inc. and Facebook Inc.
“It’s really an astonishing first-day opening considering all the criticism it’s endured over the past couple of months,” said Lee Simmons, an IPO researcher at Dun & Bradstreet. “This signals that there’s really pent-up demand for these types of stocks.”
The stock, which was priced Thursday night at $20, closed at $26.11. Groupon raised $700 million in the offering, which valued the company at $12.7 billion. The stock trades on the Nasdaq Stock Market under the ticker symbol “GRPN.”
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-- Walter Hamilton
Photo: The entrance to Groupon's headquarters in Chicago. Credit: Tim Boyle/Bloomberg
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