Groupon IPO road show could be a horror show

Daily-deal site reportedly plans to pitch potential shareholders despite problems, skepticism

Groupon, the Chicago-based start-up that specializes in online daily deals and creative accounting, finally will get its IPO road show, um, on the road next week, according to All Things Digital's Kara Swisher.

(Quick note: Kara suffered a mini-stroke Tuesday after a 14-hour plane flight to China. She says she's doing fine now. That's great to hear, and I hope she's out of the hospital soon.)

Citing "multiple sources close to the situation," Swisher reports that Groupon will begin meeting with investors about its initial public offering starting next Monday or Tuesday.

If those sources are accurate, this is the second time Groupon has scheduled a road show. The company was all set to pitch investors in September, but bailed on that plan, reportedly because of stock market volatility.

I have no idea if a company planning an IPO has ever canceled it as a result of a disastrous road show. If not, Groupon could be the first. Since filing in early June to go public, the company has been hit with one self-inflicted wound after another, most prominently drawing the harsh scrutiny of the Securities and Exchange Commission for its practice of overstating revenue.

Then there were the departures this year of not one, but two chief operating officers. And the comments from CEO Andrew Mason and co-founder Eric Lefkofsky that arguably violated the SEC's "quiet period" rules. Not to mention the continued heavy losses as Groupon spends wildly on marketing.

All of which should make for excellent topics of discussion with investors next week, assuming Groupon actually takes to the road.

Groupon initially hoped its IPO would result in a valuation of up to $25 billion. Good luck with that pipe dream now. Maybe it'll end up with a post-IPO valuation in excess of the $6 billion offered by Google late last year. Then again, maybe not.

Given it's obvious problems and continued heavy losses, it's hard to see how Groupon can attract serious interest from investors. On the other hand, as I wrote recently, the world is full of suckers.

ITWorld DealPost: The best in tech deals and discounts.
Shop Tech Products at Amazon