Report: Groupon reevaluating IPO plans, cancels investor roadshow

Social commerce platform Groupon has reportedly canceled its investor roadshow and is reconsidering its plans for an initial public offering as stock market volatility continues to mount. Citing a source familiar with the matter, The Wall Street Journal reports Groupon has not yet scrapped its IPO plans but is instead reassessing its timing on a week-to-week basis.

Insiders say Groupon initially planned to go public soon after the Labor Day holiday, pricing its shares sometime in mid-September--its roadshow was planned for next week. Groupon is expected to command a $20 billion valuation if and when it makes its stock market debut. A Groupon spokesperson declined to comment.

Although tech companies including LinkedIn, Pandora and Zillow made splashy IPO debuts earlier this year, investors are growing increasingly concerned about the viability and sustainability of web businesses, especially given the unpredictability of the market as a whole. "The drop in the market has got everybody running scared," David Menlow, president of independent research firm IPOfinancial.com, told the WSJ.

Groupon has also attracted scrutiny from the U.S. Securities and Exchange Commission over a metric it calls "adjusted consolidated segment operating income," or adjusted CSOI. Investors and analysts contend that CSOI draws attention away from Groupon's extensive marketing costs and other expenses related to its daily deals service.

The Wall Street Journal adds that last week, the SEC contacted Groupon after the emergence of internal memo from CEO Andrew Mason to his staff, in which he balked at speculation the firm is running out of money. Making public statements about a company's financial status during its IPO process is prohibited by SEC rules.

For more:
- read this Wall Street Journal article

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