Groupon Now Worth Less Than What Google Originally Offered For the Company
Groupon continued to drop on Monday, shedding another 7.64% in value to close at $8.95.
Groupon is now valued at $5.78 billion. Shortly after going public in November, the company was worth well over $20 billion.
The $5.78 billion number is important, as Google reportedly offered $6 billion for the company back in the fall of 2010. This $6 billion number reportedly consisted of $3.5 billion in upfront cash, and the remainder in "earn-outs", or future payments if Groupon hit certain targets.
It's important to note that Groupon was confident that they would hit these targets and collect the remainder of their $6 billion.
Groupon eventually decided to turn down Google's deal and list their shares on the open market. Groupon's management team apparently felt confident that the company would be worth as much as $25 billion if shares were offered to the public.
Groupon listed their shares in November of 2011 and the company was (temporarily) valued at well over $20 billion. Groupon's management team looked like geniuses for turning down Google's down.
Seven months later - not so much.
Groupon's management team and investors could have walked away with billions in cash and earn-out targets that they were confident of hitting. Instead, they are faced with a cratering stock and an increasingly tarnished company.
Filed under: Internet Companies