Morgan Beats Goldman to Be Lead Bookrunner in Groupon IPO


Groupon today filed for its long-awaited IPO.

The daily deals site, which rejected a takeover bid from Google, is looking to raise $750 million. That will likely change in future filings. Groupon didn’t disclose how many shares it would sell, their price range or on what exchange the stock will list. That information will come in future filings. Groupon expects to trade under the ticker GRPN.

Morgan Stanley is lead bookrunner on the deal, while Goldman Sachs is also a bookrunner. Credit Suisse is listed as an underwriter.

Why did Goldman lose out to Morgan? Lloyd Blankfein, Goldman’s chairman and CEO, visited Groupon in January to personally pitch the company on leading the Groupon IPO, according to Business Insider.

It’s not clear why Goldman lost out, but I can speculate. Morgan was lead bookrunner on the LinkedIn IPO, which soared 109% in its first day. Morgan also invested in Groupon’s $950 million fundraising in January. According to the filing, Morgan invested $75 million in December for roughly 2.4 million shares (Fidelity and T. Rowe also invested at this time; they each put in $100 million for about 3.2 million shares each).

Chicago-based Groupon, which offers 1,000 daily deals to its 83 million subscribers (a deal this week was 50% off of Old Navy), employs more than 7,000 people. Groupon is the first of the daily deal companies to file for an IPO.

Groupon, despite having produced lots of revenue, is losing money. Revenue in 2010 was $713.4 million, up from $30.5 million in 2009. However, the company had $413.4 million in losses for the year. The company, for the quarter ended March 31, produced $644.7 million in revenue (compared to $44.2 million in 2010) and $113.9 million in losses. Groupon had $208.9 million in cash and long-term liabilities of about $15 million as of March 30, according to the filing.

So what happened to the $950 million Groupon raised earlier this year? According to All Things Digital, the company kept only $136 million for itself. It paid out $810 million, via stock purchases, to CEO Andrew Mason and some of his backers, including Eric Lefkosky, a Groupon co-founder.

Groupon has yet to reveal which investors are selling in the IPO. Mason owns 7.7% of Class A shares and 41.7% of Class B. The stocks are basically identical except that class B have increased voting rights (but it’s unclear how many more votes Class B gets).