Groupon Prospectus

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    29AUG201113210610

    30,000,000 Shares

    CLASS A COMMON STOCK

    Groupon, Inc. is offering 30,000,000 shares of its Class A common stock. This is our initial public offeringand no public market currently exists for our shares. We anticipate that the initial public offering price ofour Class A common stock will be between $16.00 and $18.00 per share.

    Following this offering, we will have two classes of outstanding common stock, Class A common stock and

    Class B common stock. The rights of the holders of Class A common stock and Class B common stock willbe identical, except with respect to voting and conversion. Each share of Class A common stock will beentitled to one vote per share. Each share of Class B common stock will be entitled to 150 votes per shareand will be convertible at any time into one share of Class A common stock. Outstanding shares of Class Bcommon stock will represent approximately 36.3% of the voting power of our outstanding capital stockfollowing this offering.

    We have applied to list our Class A common stock on the NASDAQ Global Select Market under the symbolGRPN.

    Investing in our Class A common stock involves risks. See Risk Factorsbeginning on page 11.

    PRICE $ A SHARE

    UnderwritingPrice to Discounts and Proceeds toPublic Commissions Groupon

    Per Share . . . . . . . . . . . . . . . . . . . $ $ $Total . . . . . . . . . . . . . . . . . . . . . . . $ $ $

    Groupon, Inc. has granted the underwriters the right to purchase up to an additional 4,500,000 sharesof Class A common stock to cover over-allotments.

    The Securities and Exchange Commission and state securities regulators have not approved ordisapproved these securities, or determined if this prospectus is truthful or complete. Any representation

    to the contrary is a criminal offense.The underwriters expect to deliver the shares of Class A common stock to purchasers on ,2011.

    MORGAN STANLEY GOLDMAN, SACHS & CO. CREDIT SUISSE

    ALLEN & COMPANY LLC BofA MERRILL LYNCH BARCLAYS CAPITAL CITIGROUP

    DEUTSCHE BANK SECURITIES J.P. MORGAN WELLS FARGO SECURITIES WILLIAM BLAIR & COMPANY

    LOOP CAPITAL MARKETS RBC CAPITAL MARKETS THE WILLIAMS CAPITAL GROUP, L.P.

    , 2011Theinformationinthispreliminary

    prospectusisnotcompleteandmaybec

    hanged.

    Wemaynotsellthesesecurities

    untiltheregistrationstatementfiledwiththeSecuritiesandExchange

    Commissioniseffective.

    Thisprelim

    inaryprospectusisnotanoffertosellthese

    securitiesandwearenotsolicitingoffersto

    buythesesecuritiesinanystatewherethe

    offerorsaleisnotpermitted. PROSPECTUS (Subject to Completion)

    Issued October 21, 2011

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    TABLE OF CONTENTS

    Page Page

    Prospectus Summary . . . . . . . . . . . . . . . . 1 Executive Compensation . . . . . . . . . . . . . 102Risk Factors . . . . . . . . . . . . . . . . . . . . . . 11 Related Party Transactions . . . . . . . . . . . 122Letter from Andrew D. Mason . . . . . . . . 33 Principal Stockholders . . . . . . . . . . . . . . . 130

    Special Note Regarding Forward-Looking Description of Capital Stock . . . . . . . . . . 133Statements and Industry Data . . . . . . . 35 Material United States Federal TaxUse of Proceeds . . . . . . . . . . . . . . . . . . . 37 Considerations . . . . . . . . . . . . . . . . . . 140Dividend Policy . . . . . . . . . . . . . . . . . . . 37 Shares Eligible for Future Sale . . . . . . . . 146Capitalization . . . . . . . . . . . . . . . . . . . . . 38 Underwriting . . . . . . . . . . . . . . . . . . . . . 148Dilution . . . . . . . . . . . . . . . . . . . . . . . . . 41 Legal Matters . . . . . . . . . . . . . . . . . . . . . 155Selected Consolidated Financial and Experts . . . . . . . . . . . . . . . . . . . . . . . . . 155

    Other Data . . . . . . . . . . . . . . . . . . . . . 43 Where You Can Find AdditionalManagements Discussion and Analysis of Information . . . . . . . . . . . . . . . . . . . . 155

    Financial Condition and Results of Index to Consolidated FinancialOperations . . . . . . . . . . . . . . . . . . . . . 47 Statements . . . . . . . . . . . . . . . . . . . . . F-1

    Business . . . . . . . . . . . . . . . . . . . . . . . . . 75 Appendix AEmail from the Chief Management . . . . . . . . . . . . . . . . . . . . . 94 Executive Officer of Groupon, Inc. . . . . A-1

    You should rely only on the information contained in this prospectus or in any free writing prospectusfiled with the Securities and Exchange Commission. Neither we nor the underwriters have authorizedanyone to provide you with additional or different information. We are offering to sell, and seeking offersto buy, our Class A common stock only in jurisdictions where offers and sales are permitted. Theinformation in this prospectus or any free writing prospectus is accurate only as of its date, regardless of itstime of delivery or any sale of shares of our Class A common stock.

    Until , 2011 (the 25th day after the date of this prospectus), all dealers that buy, sell ortrade shares of our Class A common stock, whether or not participating in this offering, may be required todeliver a prospectus. This delivery requirement is in addition to the obligation of dealers to deliver aprospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

    For investors outside the United States: Neither we nor any of the underwriters have done anythingthat would permit this offering or possession or distribution of this prospectus in any jurisdiction whereaction for that purpose is required, other than the United States. You are required to inform yourselfabout and to observe any restrictions relating to the offering of the shares of Class A common stock andthe distribution of this prospectus outside of the United States.

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    PROSPECTUS SUMMARY

    This summary highlights information contained elsewhere in this prospectus and does not contain all of theinformation you should consider in making your investment decision. Before investing in our Class A commonstock, you should carefully read this entire prospectus, including our consolidated financial statements and therelated notes and the information set forth under the headings Risk Factors and Managements Discussion and Analysis of Financial Condition and Results of Operations, in each case included elsewhere in this

    prospectus. Except where the context requires otherwise, in this prospectus the terms Company, Groupon,we, us and our refer to Groupon, Inc., a Delaware corporation, and where appropriate, its direct andindirect subsidiaries.

    GROUPON, INC.

    Groupon is a local e-commerce marketplace that connects merchants to consumers by offering goodsand services at a discount. Traditionally, local merchants have tried to reach consumers and generate salesthrough a variety of methods, including the yellow pages, direct mail, newspaper, radio, television andonline advertisements, promotions and the occasional guy dancing on a street corner in a gorilla suit. Bybringing the brick and mortar world of local commerce onto the internet, Groupon is creating a new wayfor local merchants to attract customers and sell goods and services. We provide consumers with savingsand help them discover what to do, eat, see and buy in the places where they live and work.

    We started Groupon in October 2008 and believe the growth of our business demonstrates the powerof our solution and the size of our market opportunity:

    We increased our revenue from $1.2 million in the second quarter of 2009 to $430.2 million in thethird quarter of 2011. We generated these revenues from gross billings of $3.3 million for the secondquarter of 2009 as compared to gross billings of $1,157.2 million for the third quarter of 2011. Wehad net income of $21,000 for the second quarter of 2009 as compared to a net loss of $10.6 millionfor the third quarter of 2011.

    We expanded from five North American markets as of June 30, 2009 to 175 North Americanmarkets and 45 countries as of September 30, 2011. Revenue from our international and North American operations was $268.7 million and $161.5 million, respectively, in the third quarter of2011.

    We increased our subscriber base from 152,203 as of June 30, 2009 to 142.9 million as ofSeptember 30, 2011. A total of 43,014 customers purchased Groupons through the end of thesecond quarter of 2009 as compared to 29.5 million through the end of the third quarter of 2011,including 16.0 million customers who have purchased more than one Groupon since January 1,2009.

    We increased the number of merchants featured in our marketplace from 212 in the second quarterof 2009 to 78,649 in the third quarter of 2011.

    We sold 116,231 Groupons in the second quarter of 2009 compared to 33.0 million Groupons in thethird quarter of 2011.

    We grew from 37 employees as of June 30, 2009 to 10,418 employees as of September 30, 2011.

    Each day we email our subscribers discounted offers for goods and services that are targeted bylocation and personal preferences. Consumers also access our deals directly through our websites andmobile applications. A typical deal might offer a $20 Groupon that can be redeemed for $40 in value at arestaurant, spa, yoga studio, car wash or other local merchant. Customers purchase Groupons from us andredeem them with our merchants. Our revenue is the purchase price paid by the customer for the Grouponless an agreed upon percentage of the purchase price paid to the featured merchant. Our gross billingsrepresent the gross amounts collected from customers for Groupons sold, and we consider this metric to be