Groupon Insider Selling Has Investors Watching
Not so long ago, before smart money got wind of the planned Groupon insider selling, this brand name IPO had the potential to be one of the hottest, most sought after deals of the year. Then IPO mavens and institutions started looking at the numbers, which were not very impressive. Groupon’s losses basically overshadowed their impressive revenue growth. In addition private equity IPO’s have had a mixed track record because of smart money selling to retail investors, and while Groupon Insider Selling isn’t exactly in that category, IPO investors have generally stay away from deals where IPO proceeds go to management, as opposed to companies that actually use the raise for future growth and operations.
However, the tide has seemed to change, The amount of stock being sold has been scaled back drastically as the deal size has become considerably smaller. In other words the Groupon insider selling might become alsmost a non event.
It’s no secret that hedge funds and institution often go long large cap NASDAQ names, when sexy IPO‘s trade at heavy premiums. This effect often creates short term rallies and trickles down to increase the confidence of retail investors.
Groupon Insider Selling Has Traders Worried
Is this the deal that can potentially turn the tide for the market ? Or will the bad taste from the formerly planned Groupon insider selling turn the smart money off ?
Well we think it’s unfair to put so much stock in the performance of one deal. Early reads are showing that the deal could do exceptionally well if the market remains stable and Europe doesn’t implode. But if our recent decline continues this deal could be allocated to retail accounts in a way that nobody could have imagined only a few months back. Despite the scaled down size of the offering.
So for now it might best just to use the broader markets as a gauge for the interest in Groupon. The decreased Groupon insider selling is a start, but we are not out of the woods just yet.
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