The collapse of Groupon’s share price below its IPO price of $20 established Nov. 3 could be a bellwether for some pending high-tech IPOs.
Pending deals for lesser-known companies like Zynga, Vocera Communications and M/A-com Technology Solutions could all be imperiled and they have been in registration for months. Meanwhile, Wall Street and social networkers worldwide are hotly anticipating a Facebook IPO. By law, Facebook, with more than 500 shareholders, must go public or publish full financial results by next quarter.
Shares of Groupon, the Chicago-based daily deals couponing site, traded at $17.20 at midday Wednesday, a day after they first fell below the $20 IPO price set by underwriters Morgan Stanley, Goldman Sachs andCredit Suisse on Nov. 3.
Groupon raised $700 million in the process. Shares Nov. 4 first traded around $30.90 before closing at $26.11, valuing the company at $16.6 billion.
At the current share price, Groupon’s value has plunged to around $10.9 billion. While the underwriters got $42 million in fees as well as the right to sell an additional 4.5 million shares, a fall below the IPO price is an embarrassment.
Now that the S&P 500 has declined 6.2 percent in the past month amid economic uncertainty, the market has darkened for the other IPOs. Indeed, after waiting over four months, Groupon’s underwriters made haste and then mounted their deal while the stock market was strong.
Imperva, the computer security software developer, also finished its IPO in the same window: priced at $18 on Nov. 8, the Redwood Shores, Calif.-based company’s shares are trading around $26.20, giving it a market capitalization of $577 million. Underwriters were JPMorgan Chase and Deutsche Bank.
Last week, Yelp, the San Francisco-based review site, announced a $100 million IPO, scheduled for early next year. That came two months after rival Zagat Surveys inNew York was acquired by Google for about $200 million, which went to co-founders Tim and Nina Zagat, who squelched their own plans for an IPO.
[ibtimes]
