Shares in Groupon Inc., a pioneer of the online coupon business, jumped by more than a third in their first day of trading on the Nasdaq stock exchange.
A little before markets closed, the shares were trading at $27.19, well above the $20 their initial public offering was priced at Thursday evening. That's a gain of about one-third. The stock had earlier been as high as $29.52, a gain of almost 50 per cent on the day.
Early estimates of the stock's IPO pricing had been as high as $25 a share, before being scaled back to as low as $16 to $18 in recent weeks as stock markets cooled. The IPO only sold 5.5 per cent of Groupon's shares, which means the market is currently valuing the company as a whole at more than $17 billion US.
The Chicago-based company is the market leader in the fast-growing group-buying business. The company partners with local companies to offer drastic discounts via the form of coupons, emailed to their millions of email subscribers.
Though it's spawned many copycats after its 2008 launch, Groupon has the advantage of being first. This has meant brand recognition and investor demand, as evidenced by its sizzling public debut.
Although the company has tens of millions of subscribers, filings with securities regulators reveal that it is not yet profitable.