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SecondMarket Tries to Get a Piece of Groupon IPO

(Reuters) – SecondMarket Inc, a leading player in the market for private company stock, is trying to get a piece of the initial public offering of Groupon Inc, according to an email obtained by Reuters on Monday.

SecondMarket Senior Vice President Jeff Thomas emailed potential investors on Friday who previously traded through the firm to see if they were interested in buying Groupon shares in the IPO.

SecondMarket will be working with Morgan Stanley, one of the top underwriters on the Groupon IPO, as a member of the selling group for the offering, the email said.

SecondMarket declined to comment, while Morgan Stanley and Groupon did not respond to requests for a comment.

SecondMarket, started by Chief Executive Barry Silbert, is an online platform that brings together buyers and sellers of illiquid assets including stock of private companies.

SecondMarket has thrived by helping private companies sell stock without having to go public. The transactions often help former and current employees sell equity, while letting investors buy into private companies before an IPO.

SecondMarket often presents itself as an alternative or competitor to traditional Wall Street investment banks. In an interview with the Wall Street Journal on Saturday titled “So Who Needs Wall Street?” Silbert said SecondMarket aims to “essentially disintermediate anyone on Wall Street that does not add value.”

Participating in Groupon’s IPO may be a departure from SecondMarket’s original approach.

Thomas’ Friday email said potential investors in the offering would be asked to complete a “suitability questionnaire” and to speak to one of SecondMarket’s market specialists.

Potential investors would also have to fill out an “indication of interest” questionnaire, telling SecondMarket how many Groupon shares they would like to buy in the IPO, according to the email.
“At this time, we do not have information regarding the allocation of securities to SecondMarket, and cannot provide any assurance that even if we were to determine that an IPO is an appropriate investment for you, you would be allocated securities,” Thomas wrote in the email.

SecondMarket also warned in the email that an IPO is “risky and speculative” and may not be appropriate for many investors.

(Reporting by Alistair Barr; Editing by Tim Dobbyn)