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Groupon (NASDAQ:GRPN), the online coupon company, is scheduled to make its long-anticipated initial public offering on the Nasdaq on Friday. And speculation is already running rampant that the IPO could be higher than expected.

Reuters reported today that shares of Groupon’s IPO could be priced $1-$2 higher than the $16 to $18 per share that has been forecast. Groupon is planning to sell 30 million shares during its IPO.

The rumored price hike comes as a bit of a surprise considering all the bad publicity Groupon has received in recent weeks. The SEC determined that Groupon inflated its 2010 revenue by $400 million, and has twice asked the company to revise its method of reporting revenue. Furthermore, the company reported net losses in $101.2 million in June and $10.6 million in September.

The recent turmoil casts a shadow over a company that has by and large been growing at a remarkably rapid rate. Revenue for Groupon’s September quarter were over $430 million – more than five times the $82 million in revenue the company reported during the same quarter last year. The company rose to prominence in 2008 by offering customers significant discounts on everything from restaurant meals to shoes to vacation getaways.

Despite its lofty growth, Groupon’s spending is outpacing its (seemingly) considerable revenue. The company’s 2010 operating expenses grew nearly 6,000 percent (!) from the previous year – nearly triple the otherwise impressive 2,241 percent revenue gains it made in 2010. That’s why some analysts are questioning whether Groupon’s business model is sustainable.

Its reported last-minute price hike is perhaps a sign that Groupon CEO Andrew Mason’s recent IPO publicity tour, intended to drum excitement about the stock, has worked. Still, with so much mystery surrounding both its accounting practices and business model, Groupon’s IPO does not appear to be worth the risk.

Disclosure: None

Source: Questions Surround Groupon IPO