Groupon rejected $6B from Google, went public, and lost 99.4% of its value

In December 2010, Google offered to buy Groupon for approximately $6 billion. The board rejected it. A year later, on 4 November 2011, Groupon went public at a $12.6 billion valuation. Before the IPO, the company had paid out over $940 million of the $1.12 billion in venture capital it had raised — more than 84% — to founders and early backers, leaving it technically insolvent at the time of its listing.

The IPO filing used a non-standard accounting metric, ACSOI, that showed $60.6 million in positive operating income for 2010. Under standard accounting, the company had a $420 million operating loss. By 2012, the stock had lost 80% of its value. In March 2012, Groupon restated 2011 revenues downward.

Revenue peaked at nearly $3.2 billion in 2014, then declined steadily as merchants discovered that only about 20% of Groupon buyers returned for full-price purchases. The company exited seven countries in 2015, cut from 27 to 15 in 2016, and eliminated roughly 1,100 positions. In April 2020, it cut 44% of its workforce — about 2,800 jobs.

By March 2023, the stock had lost 99.4% of its IPO value. Revenue in 2023 was $515 million — down 84% from the 2014 peak — with negative equity of $41 million. The company that rejected $6 billion from Google was worth a fraction of that sum.