Discussion Questions 1. (Optional) What are the characteristics of the IPO market at the time of the case? 2. What are the advantages or disadvantages of a firm going public? Research has shown that IPOs are underpriced, on average over time by about 10%, but underpricing can be substantially higher. Why does this occur and what are the implications of underpricing? Why is Groupon considering an IPO now? What are some of the factors relating to IPOs that could influence Groupon's decision to go public or stay private? 3. How does Groupon perform based on the metrics CEO Mason believes are important? What is your assessment of the metrics Mason has highlighted in the firm's financial reports? What metrics should be used to assess Groupon? 4. Using the industry and company information in the case, what would a Porter's five forces analysis show about Groupon and its ability to compete? 5. What assumptions underlie the valuation of Groupon as of November 2011? What is your assessment of these assumptions? What is the value of Groupon, based on discounted cash flow? What would a multiples valuation show? 6. What valuation factors are the least certain and therefore the analysis is most sensitive to these factors? What other factors might influence the valuation? Is Groupon's business model sustainable? Does it have a long-term competitive advantage? 7. (Optional) Which types of investors should purchase Groupon IPO shares? In other words, for which types of investors is this an appropriate investment choice? 8. What would be an appropriate value for Groupon at the time the IPO shares are offered?