Former Northwestern music major Andrew Mason was not unfamiliar with the world of Internet startups by the time he founded Groupon. With $1 Million seed capital provided by the founder of InnerWorkings, Eric Lefkofsky, Mason launched ThePoint.com in November 2007, a quirky website that drew the attention of the national press with its users’ humorous ad campaigns. Although not wildly successful, ThePoint, however, became the brainchild for Groupon when Mason noticed how the most effective campaigns banded large numbers of consumers together to gain purchasing power. Thus, Groupon was born, and Groupon valuation has grown exponentially almost overnight.
Groupon valuation history looks almost like a roller coaster, with the company initially valued at a bare $250 Million in December 2009.
Current Valuation of Groupon
By April 2010, Groupon announced that with its latest round if private placements, the company had a valuation of $1.35 Billion. By November of the same year, Google made an offer for Groupon valued at $5.3 Billion, with A $700 Million earnout provision, for a total of $6 Billion.
The Google offer became invaluable recognition for a company that was barely two years old, an overnight financial success by any standard.
This Google offer, although not consummated, nevertheless became the mystical foundation that saw the Groupon valuation rumored to rise to $15 Billion by January 2011, then to an astounding $25 Billion by March 2011 due to rumored IPO talks and valuation performed by Businessweek.
By June 2011, Groupon had opened its books to the world in anticipation of its IPO, but after a few mishaps, from an accounting standpoint and otherwise, Groupon valuation had dropped to less than $6 Billion by October 2011.
With an IPO share price of $20, the stock managed to rise to an all time high of $31.14.
Nevertheless, after Groupon restated its financial results on March 30, 2012, the stock fell to as low as $11.92, wiping out more than $4 Billion in market capitalization.
Notwithstanding the extreme volatility associated with the Groupon valuation history, analysts still have a positive outlook on the company, as Morgan Stanley casually dismissed the restatement. As of late April 2012, there are 7 buy ratings, 12 hold ratings, and 4 sell ratings.