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Groupon May be a Victim of Inflated Expectations

Many years ago, a venture capitalist named Stewart Alsop went public with his view that Facebook should not have accepted an investment from Microsoft based on a valuation of $15 billion.

More particularly, how they should have avoided that information being leaked to the public. The argument then was that Facebook could either go public or be purchased for a lesser figure.

This would make the company appear as though it were declining.

Obviously, he was wrong in his assessment of Facebook, but the lesson may be taking shape at Groupon. Where it was first reported is unclear, but it is suggested that Groupon is looking for a post-IPO value in excess of $25 billion. This can be deduced just by checking the SEC documents, so this was obviously leaked by someone at Groupon or a person who met with their executives.

Regardless of all their issues, including their problems with the SEC, Groupon has become a revenue-producing beast, and they will certainly be pricing an IPO before the end of the year. Unfortunately, anything below that $25 billion mark will now be viewed as a failure or a loss of momentum. Sadly, no one seems to have learned from past mistakes.