MediaFile

The dreary details of Groupon’s future

By Kevin Kelleher
The views expressed are his own.

Underwriting is usually a cheerless business. Taking a company public involves long regulatory filings, endless hours of due diligence and PowerPoint-driven roadshows. Investors need details, even if the details are dreary.

And then there’s the Groupon IPO. The daily deal company went public at $20 a share Friday and surged as high as 40%, briefly valuing the company at $20 billion. It may not be the hottest tech IPO so far this year — that distinction belongs to LinkedIn, which doubled its value on its first day — but it is the most discussed and divisive deal. Bulls and bears argue over the company and its future with a kind of passion that belongs to the culture wars.

On its face, the IPO is just about a company raising money, but it’s also so much more: It’s a spectacle — a dramatic tale of the fastest growing company in history brushing off a $6 billion bid by Google to go public and quickly become worth three times as much. It’s a scrappy outsider vindicating critics who attacked it mercilessly during an enforced quiet period. It’s a gaudy billboard luring other tech startups to come into the public markets.

What the Groupon story is missing, though, is all those dreary details. For all the metric-filled spreadsheets and PDF files of analysis, Wall Street is still a place driven by emotion. And the debate over Groupon is really about the difference between the emotional appeal of Groupon’s IPO and the less appealing story that lies in the minutiae.

A look at some of the details of the IPO itself suggest that this offering was carefully engineered to create a big splash. The prospectus lists 14 Wall Street firms, including Goldman Sachs and Morgan Stanley, the two biggest underwriters. These firms know that with a sluggish IPO market — only 18 companies went public in the third quarter, compared with 33 in the third quarter of 2010 — a big name IPO like Google or Amazon can whet the market’s appetite for more IPOs.

Do tech giants really need a tax holiday?

By Kevin Kelleher
The views expressed are his own.

I want a new MacBook Pro. And I’d really love to buy one. But Apple won’t let me.

It’s not that I can’t afford it – the cash is just sitting there in my account. And it’s not that I don’t want Apple to have the money. I’d love to do my share to create jobs at One Infinite Loop or to reward Apple shareholders for their faith in the company’s impressive profit growth. No, Apple won’t let me buy a Macbook Pro because it expects me to pay $2,500. And I simply don’t want to pay that much, so I’m asking Apple to lower the price. And they should accept that; after all, $500 is better than $0.

I even went into an Apple store and asked the blue-shirted genius who greeted me if Apple would part with a 17-inch Macbook Pro for $500. He looked at me like I was crazy. Which is pretty much what I expected, but I figured I had a shot. Because I was simply following the example set by Apple and other big-cap, cash-rich tech giants who have done an end-run around tax laws. If Apple can ask for a tax holiday to bring its overseas profits home, why can’t I ask for a Macbook holiday so I can bring a new laptop home?