Groupon Prices Its IPO At A $12.7B Valuation, Has A Lot To Prove

Groupon has priced its IPO at $20 a share according to reports, which would give the company a $12.7 billion valuation and mean that it’d be seeking $690 million in tomorrow’s offering, by floating only 5.4 percent of its shares.

Right before the pricing news hit, I sat down with SoftTechVC founder and Groupon shareholder Jeff Clavier to talk about the strategy behind the company’s decision to go public. Clavier guessed accurately that Groupon’s IPO pricing would be about $20 a share and dismissed earlier reports of a $25 billion valuation as unrealistic.

On the more modest pricing; “They need a warm reception in the public market, because they have all this baggage — They have all this bad history of press and analysts hating the company,”  Clavier said, referring to press coverage of their unconventional accounting on Groupon’s S-I as well as its tricky international expansion and scaling issues.

Despite the offering being “oversubscribed” Clavier emphasized that whether or not people actually buy the stock tomorrow and don’t dump it six months from now as the key harbingers of whether Groupon has what it takes to avoid being the Pets.com of our time, “In the long run it’s an interesting viable long-term business. [But] they have a lot to prove as a public company that has gone from zero to IPO in three years.””