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Groupon crashes to $16.96, way below the $20 IPO starting point


By Noel Young, Correspondent

November 23, 2011 | 2 min read

Shares in Groupon, the daily deals company, once up at $26, were yesterday way below the $20 figure set for their IPO on November 3 .The stock closed yesterday at $16.96, after beginning the day at $20.07. The Wall Street Journal commented,"This is embarrassing, folks."

Groupon: back to the starting gate

The stock had dropped the previous day by $3.51 to $20.07 , its biggest one-day loss far after hovering around $26 for the past few weeks.

Analysts said the fall might be down to concerns about the health of the e-commerce market and rising competition.

Groupon's main rival, LivingSocial , is offering 20 national deals with major retailers starting on so-called Black Friday, the day after Thanksgiving.

The Wall Street Journal said the sharp drop in Groupon's price "may be a sobering sign for other high-profile Internet companies awaiting IPOs."

David Menlow, president of told the WSJ the sudden decline represented "a break in the thinking that the Internet is still a safe platform for technology speculation," It meant investors would be more skeptical of "automatic high-demand IPO."

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