Groupon files its IPO papers

Groupon, helping to blow more air into the growing tech bubble, filed for an initial public offering with the Securities and Exchange Commission.

The daily-deals company wants to raise $750 million. It's hired Morgan Stanley, Credit Suisse and Goldman Sachs as its bankers.
The announcement comes a week after rumors swirled that online gaming company, Zynga, will file for an IPO, and two weeks after the employment networking site LinkedIn went public.
Late last year, Groupon was seen as an acquisition target for Google, reportedly for a sum of around $5 billion.

Groupon chief executive Andrew Mason wrote a letter to potential investors, explaining the company's business strategy and warning that he intends to continue to focus on long-term goals.

"We spend a lot of money acquiring new subscribers because we can measure the return and believe in the long-term value of the marketplace we're creating," Mason wrote. "In the past, we've made investments in growth that turned a healthy forecasted quarterly profit into a sizable loss. When we see opportunities to invest in long-term growth, expect that we will pursue them regardless of certain short-term consequences."
In the filing, Groupon said it intends to use the proceeds for general corporate purposes, including acquisitions, though the company added that it does not have any acquisition commitments currently.
In his letter, Mason wrote that shareholders should "Expect us to make ambitious bets on our future that distract us from our current business. Some bets we'll get right, and others we'll get wrong, but we think it's the only way to continuously build disruptive products.

The filing note how quickly Groupon has grown. The company blossomed from five North American markets in June 2009 to 175 North American markets as well as markets in 42 other countries as of March. In the same period, the subscriber base soared from 152,000 to 83.1 million. Those customers helped generate $3.3 million in revenue in the second quarter of 2009, a figure that jumped to $644.7 million in the first quarter to 2011. And Groupon had 37 employees in June 2009, and now employs more than 7,100 workers.

That said, for the quarter that ended March 31, Groupon lost $146.5 million, compared to a profit of $8 million in the year earlier period. In 2010, the company lost $456.3 million, compared to a loss of $6.9 million in 2009. The filing offers some other details about the company, including executive compensation. Mason received $180,000 salary last year with no bonus. He opted to reduce his base salary this year to $575, and has eliminated the opportunity to get a bonus. That said, Mason also purchased 1.8 million shares in 2009, though he forfeited 150,000 of them this April for undisclosed reasons.
At one point in his letter, Mason took a light-hearted approach, noting that Groupon was an offshoot of The Point, a business designed to help users raise money for social action. Mason, though, shifted his focus to Groupon, which offered far more potential.

"After selling out on our original mission of saving the world to start hawking coupons, in order to live with ourselves, we vowed to make Groupon a service that people love using," Mason wrote.

Source: http://news.cnet.com