Inc.'s Burt Helm talks to Ernst & Young markets expert Herb Engert about the rocky road ahead he expects for initial public offerings.
After months of stops and starts, Groupon finally intends to go public. CEO and founder Andrew Mason has begun pitch sessions to investor groups—part of the so-called roadshow. You can see his 30-minute presentation online, too.
Groupon plans to issue its first shares on NASDAQ on Nov. 4 and hopes to raise close to $200 million on a $11.4 billion valuation. These are exciting figures but they're considerably lower than those circulated a few months ago, when Groupon was linked to a $30 billion valuation. That’s because the IPO market halted after Washington's 11th-hour Debt Deal, and is now only slowly creaking back open. Last week, Liberty Mutual withdrew its IPO, and the most-recent company to go public, Ubiquiti Networks, a wireless networking company in San Jose, Calif., cut the per-share opening price on Oct. 14 by some 30 percent.
To get a better gauge of what's to come in this tumultuous IPO period, Inc.’s Burt Helm spoke with Ernst & Young’s Herb Engert, Americas Leader of Strategic Growth Markets. What does Engert predict about the public markets right now? Watch the video to find out.
In this week’s TrendWatch Facts & Figures, some more details about the IPO market halt:In mid-August, the IPO market started to shut down. Only two companies went public: a Boston software company, and Tudou, a Chinese video website. Each company discounted its per-share opening price ahead of its IPO. Next up: Ubquiti, which started trading Oct. 14. Originally hoping to get $20 to $22 per share, it discounted the price range to $15 to $17. In all, 71 percent of 2011 IPOs are currently trading below issue price, according to Renaissance Capital, which publishes IPO research. The Renaissance Capital index of the U.S. IPO market is down 19.5 so far this year.
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