Daily deals company Groupon Inc.'s initial public offering is expected to price after the market closes Thursday, with some analysts expecting the stock to price slightly above its current range of $16 to $18.
Groupon's IPO was valued as high as $25 billion in June. But in a regulatory filing Oct. 21, the company said that it expects a valuation that is less than half that, between $10.1 billion and $11.4 billion.
That would still put Groupon's market value above that of another Internet darling, the professional networking service LinkedIn Corp. LinkedIn went public in May. LinkedIn's stock has gained nearly 90 percent since its IPO, closing Wednesday at $84.50. That gives the company a market value of about $8 billion.
Groupon, which pioneered online daily deals through group discounts, has spawned a slew of copycats and its fair share of criticism since its 2008 start. The company has experienced exponential growth, with its employee base now around 10,000 people, about four times as many as Facebook's.
But competition is growing — from upstarts like LivingSocial to bigwigs such as Amazon.com Inc. And some merchants and customers are questioning the quality of Groupon's offerings. Some small businesses that run deals with Groupon have been flooded with people wanting to cash in their bargain, but they complain that few of them become returning costumers.
Scott Sweet, longtime IPO analyst and the owner of IPO Boutique, said he has a hunch Groupon will price its stock at $19, a dollar above the high end of its range.
"Knowing this company, they may go to $20," he added. "They are a company that really operates in a very unusual (manner)."
Groupon, he said, has many fundamental problems with its business model. Earlier this year, for example the company had to change the way it counts revenue — cutting it in half — after concerns raised by the Securities and Exchange Commission.
"It's an accident waiting to happen." Sweet said of the Chicago company.