Groupon Inc (NASDAQ:GRPN) is today trading at around 9.30. That puts the company’s market capitalization at around $6 billion, the same amount Google Inc (NASDAQ:GOOG) offered to buy the company for in the fall of 2010. The firm’s stock is trending downward today making it likely the company will be worth less than Google’s bid as the day goes on. Groupon went public last November for $20 per share.
Groupon’s business model along with concerns about the firm’s accounting practices have compounded Groupon’s trouble since its IPO last year. Despite those worries the company beat expectations on it earnings in the first quarter of this year.
At this year's Sohn Investment Conference, Dan Sundheim, the founder and CIO of D1 Capital Partners, spoke with John Collison, the co-founder of Stripe. Q1 2021 hedge fund letters, conferences and more D1 manages $20 billion. Of this, $10 billion is invested in fast-growing private businesses such as Stripe. Stripe is currently valued at around Read More
The most recent fall in the company’s stock appears to be related to insiders selling portions of their shares. After the IPO there was a period when insiders were not allowed to sell their shares. That period ended on June 1.
Insiders in the company own around 93% of the total shares. It seems as though many are cashing out at the first opportunity. The company’s founders, Eric Lefkofsky and Brad Keywell, said at the time of the IPO that they were committed to holding their shares.
As Groupon’s market cap falls below the price Google put on the firm two years ago it certainly looks like a failing enterprise. The firm’s board stood to make millions each from that deal. As they sit at the head of a company facing such trouble there is no doubt they are thinking back to what might have been.
Those very same executives who gambled their futures on Groupon’s business might have been sitting on a great deal of money and stable jobs at Google.