CHICAGO — Daily deals website Groupon Inc. priced its initial public offering Thursday at $20 a share, above its expected range of $16 to $18.
The company, which sold 35 million Class A shares of its stock — five million more than it originally planned — is expected to begin trading Friday on the Nasdaq under the symbol “GRPN.”
The offering is being closely watched by bankers and issuers as a measure of investor appetite for IPOs. Following three months of subpar issuance in the US, including no deals at all in September and two in each of October and August, Wall Street is busy trying to line up about a dozen new offerings before Thanksgiving week.
Among those expected to begin trading in the weeks ahead are local business ratings website Angie’s List Inc. and online games developer Zynga Inc.
Groupon is widely expected to trade well on its debut, thanks to strong demand for the deal and a scarcity of available shares. Just 5.5 percent of its stock is being floated in the IPO, an extremely small amount designed to leave investors hungry for more
If Groupon trades well on its first day after pricing above its range, it will be the first deal to do so since July, when C&J Energy Services priced above its expected range and gained five percent during its debut. Since then, no offering has priced within range and then gone on to make a gain, although two deals that cut their prices last month, Ubiquiti Networks Inc. and Zeltiq Aesthetics, enjoyed first-day gains of 16.7 percent and 19.2 percent, respectively.
Chicago-based Groupon’s journey to becoming a public stock has been a difficult one. Early on, the company came under fire for presenting an unusual accounting measure in an early version of its IPO prospectus. Analysts have questioned whether the company can continue to enjoy the level of revenue growth it has generated to date and become profitable, and have expressed concern about the amount of competition the company faces from other deal sites.
Groupon ended up with a valuation of $12.66 billion, below the $15 billion to $20 billion that was first considered when it made plans to go public.