Investors starved for initial public offerings could very well face a feast of two weighty Internet deals next year -- if online group buying site Groupon and social networking giant Facebook both go through with potential IPO plans.
Groupon, which rebuffed multibillion buyout offers from Yahoo (YHOO) and more recently a $6 billion offer from Google (GOOG), is reportedly taking a look at rolling out an IPO as early as the end of 2011, according to the The New York Times. And while Facebook is reportedly considering an IPO in 2012, one IPO analyst says he wouldn't be surprised to see the social networking giant file for an offering in 2011.
That could put these two closely watched companies on a collision course vying for the same investor dollars. But Paul Bard, vice president of global IPO investment and research firm Renaissance Capital in Greenwich, Conn., says demand will be enormous for both companies, even if they price their IPOs on the same day.
Enough Money to Go Around
"Groupon and Facebook would both be hugely successful IPOs. Investors are clamoring for growth and opportunities to get exposure to one of the largest secular growth stories within the Internet landscape today, which is the ability for Internet companies to better tap into the large and fragmented targeted advertising market," says Bard in an email interview. "Facebook obviously represents more than just that, but both of these are exciting and innovative companies still very much in the early stages of their potential (particularly for Groupon)."
Bard adds that investors won't be torn between making a decision between the two companies.
"Even if they were to price their IPOs on exactly the same day, both would be met with huge demand," he says. "When companies like these come around, demand is not the issue. Investors will line up in droves." Barid adds: "I think the IPO market is on the verge of a wave of very exciting new companies coming to market over the next 12 to 18 months. Facebook and Groupon are obviously two of the higher-profile names, but there will be many other growth IPOs coming down the chute that will be met with strong demand from investors."
Such interest in Facebook and Groupon is already evident on secondary exchanges like SharesPost and SecondMarket, where investors and employees in these privately held companies can sell their stock to interested buyers. Facebook, for example, recently cleared $25 a share in a sealed-bid auction on SharesPost.
Investors are already bellying up to the bar.