Groupon Amends IPO Filing Again

Oct. 7.11 | About: Groupon, Inc. (GRPN)

As the world awaits Groupon's (NASDAQ:GRPN) public debut, the company has trotted out a series of amendments to its SEC filing in an effort to appease both regulators' and investors' concerns. Groupon filed its latest update on Friday morning with additional adjustments to its S-1.

The largest modification is the additional disclosure Groupon provides regarding CEO Andrew Mason's leaked memo to employees. Friday's amended filing includes the full text of the infamous email, excerpts of which appeared in a previous filing.

Groupon's large marketing expenses has received much scrutiny from investors, who worry that any slowdown in spending would result in a commensurate decrease in revenue. The company states in its newest filing that it anticipates "significantly" decreasing subscriber acquisition costs over time, and that this decrease will not adversely impact ongoing business. However, it also adds that "we cannot assure you that such reductions will not have an adverse impact on our revenue." While this is typical boilerplate disclosure, it is yet another sign of how focused the SEC regulators are on making sure Groupon does not paint an overly optimistic view of the business. Similarly, Groupon added further disclosure regarding comments made in the CEO's email about its joint venture in China.

In an interesting development, the amendment also removes language referring to "selling stockholders," implying that existing shareholders no longer plan to sell in the offering. This update is particularly revealing as it indicates a move to address potential pushback from IPO investors. Given the controversy surrounding Groupon's IPO, short track record and lack of profitability, any selling by insiders (particularly after they cashed out $900 million to date) would likely be viewed as a negative signal to IPO buyers.

Groupon originally filed with the SEC to raise up to $750 million in an initial public offering this past June. The Chicago, IL,-based company plans to list under the symbol GRPN. Morgan Stanley (NYSE:MS), Goldman Sachs (NYSE:GS) and Credit Suisse (NYSE:CS) are the lead underwriters on the deal. No pricing terms have been disclosed.