Groupon may achieve the highest IPO valuation of a company to date. (Photo Credit: CC BY-ND/Justin/Single Dad Surviving)

Local business marketing and consumer coupon company Groupon is a rising star in the online retail community. The company has done so well that in November Google offered to buy Groupon for nearly $6 billion. But as the New York Times reports, Google doesn’t always get what it wants. Groupon will soon move forward with an initial public offering that could value the company at more than $15 billion.

Groupon raised $950 million from investors

Groupon’s funding push, which brought in $950 million from investors, included money from large investors such as Fidelity Investments, T. Rowe Price and Morgan Stanley. In anticipation of going public, Groupon met with banking representatives this week, anonymous sources close to the potential $15 billion-plus deal told Read Write Web. Over the past year, Groupon has expanded to 35 countries, gotten into 500 new markets (up from 30 in 2009), expanded its subscriber base by 2,500 percent. In 2010, approximately 60,000 businesses marketed their products and services to the public via Groupon’s coupon system.

Annual revenue at Groupon reportedly exceeds $1 billion. The company has more than 50 million users worldwide and a staff of 3,100.

Groupon CEO Andrew Mason has seen company’s value skyrocket

While nothing is official until Groupon’s IPO, company CEO Andrew Mason sees a Groupon stock value that’s out of sight. If Groupon does manage a $15 billion-plus IPO, it would be the highest initial valuation of a company to date, exceeding even Google’s 2004 IPO. With new Chief Financial Officer Jason Child (a 12-year veteran of Amazon’s international business arm) in place at Groupon, the ship appears to be in good hands.

Morgan Stanley and the IPO inside track

Financial experts believe that Morgan Stanley’s involvement in a potential Groupon IPO would give the company the inside track it needs to go public. Greg Sterling, analyst and founder of Sterling Market Intelligence, told the Times that Morgan Stanley’s sizable reputation on Wall Street should play a huge role in Groupon’s future.

Web startups raising major cash

Groupon’s $950 million from investors headlines what the Times calls a “particularly frenzied” time for Web startups. Twitter raised $200 million recently, and the company is valued at $3.7 billion. Career networking platform LinkedIn appears to be headed for its own IPO this year, according to insiders. Even Facebook appears to be on its way to an IPO in 2012 – reluctantly, claim reports – after a $450 million investment from Goldman Sachs.

Sources

New York Times

Read Write Web

Groupon mobile app review

The Morgan Stanley Building in Times Square, NYC (Image from jimyi, Flickr.com)

As a corporation, Morgan Stanley can only be termed as gigantic because at the end of the second quarter, they had assets in the area of $213.2 billion. Here was a company that was good enough to meet any of their obligations made by its operating units. Morgan Stanley, however, defied logic by announcing earlier this month that they would turn over their five buildings located in San Francisco to their lenders, rather than pay off the debt on them, which is also known as a Strategic Default. If any homeowner who had borrowed money on their home and taken the same option on this, they would have been reminded about their moral obligations of meeting their debts rather than just walking away. Does this sound fishy? Well, if fish could ever walk the street, even they would say that there are two sets of laws: one for the billionaires and the other for the masses.

Why Did They Do This?

Morgan Stanley had paid top dollar for these commercial properties during the huge real estate boom in 2007. Two years down the line, the market crashed and Morgan Stanley could no longer afford to hold on to the buildings. The prices of the properties had gone with the wind and tenants were hard to come by, yet they had not faced any foreclosure or defaulted on any repayments. They had enough money to meet all necessary payments, but they just chose to walk away from the properties, returning them to their lenders. They used a slang especially created for the situation called a Strategic Default. The moral obligation that applies to millions of Americans did not apply to Morgan Stanley, who just walked away from their obligations. What they left in their wake were millions of Americans talking.

Uneasy Future

Millions of Americans took out secured loans or borrowed money on the equity of their homes, and have done so on new homes as well as previously owned homes. They are perfectly capable of meeting all their obligations, and have not foreclosed or defaulted on their loans. However, if these people chose the strategic default option and returned the properties to their lenders, a tsunami of disasters would soon follow. People who had borrowed money did so when prices of the properties were high. They would be walking out of a debt at a time when prices have plummeted, preferring to treat the money already paid as a loss. However, this would probably be lower than facing a foreclosure.

Can the average person have the same option? This cannot be an option, as they just do not have the financial backing to get the same privileges as the filthy rich have. They are, after all, part of the millions that are only supposed to talk. They do not have the authority to walk like the billionaires and are obliged to meet their moral obligations. Banks and lenders may just be quivering in their seats wondering what they can do if a situation like this came up on them in the near future. It will be the specially anointed billionaires who will have to listen.

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