Daily-deals supplier Groupon was going to be the star of this year's IPOs. But over the past few months, the chances of them becoming a disappointment to investors have been inevitable. When Groupon filed its IPO papers in June, the excitement surrounding its decision was confusing. According to its filings, Groupon was planning to raise $750 million on its IPO, making it one of the largest public offer of the year. And although Groupon did not giave a valuation, reports became available following the filing, saying it may be valued at between $20 billion and $25 billion when it went public. According to the New York Times, which had a “behind the scenes” look this week at Groupon's IPO preparations, some investment banks valued them at $30 billion. The Papers showed that Groupon was a giant. The company's revenue in the second quarter of 2009 was $3.3 million. But by the end of the first quarter of this year, revenue jumped to $644.7 million. And between June 2009 and March of 2011, the company's subscriber base grew from 152,000 to 83.1 million, it shows that things were looking good for Groupon. According to the Times, investment banks were excited about their prospects. The company's three underwriters, Morgan Stanley, and Goldman Sachs, Credit Suisse all jumped at the chance to be a part of the IPO, the Times reported, stating sources. In fact, Goldman Sachs' CEO Lloyd Blankfein personally pushed for his company's involvement in Groupon's IPO, the Times wrote. The only problem is, those companies were basing their interest on a company that, right now, doesn't look nearly as successful as it did months ago. Soon after Groupon filed its IPO papers, the Securities and Exchange Commission took an ax to its financials. The SEC found that the revenue figures were based on gross revenue the startup collected before paying merchants that were using its service--and it said that Groupon's real revenue was what it collected after paying merchants. The company was forced to revise its figures down to that level. The company also came under scrutiny for the huge difference between its non-GAAP figures and GAAP income. Because of its use of an accounting system called ACSOI, or adjusted consolidated segment operating income, the firm initially only posted a loss in 2010 of $60.6 million. However, on a GAAP basis, which is seen as the most accurate of a company's financial performance, they lost $413.4 million in 2010. In its most recent amended filing from earlier this month, things haven't gotten much better for their financials. The company says now that it generated just $313 million in revenue last year and posted a loss of $390 million. In the first six months of 2011, the company has generated $688 million in revenue and a loss of nearly $204 million. That becomes even more of a worry for Groupon when considerd that it has just $225 million in cash on-hand. Its working capital--a measure of current assets less current liabilities, or the operating liquidity of a company--is nearly $305 million in the red. Things could have been better for Groupon's financial performance, though. In December and January, the company raised $946 million in cash to help bolster its amazing Internet Marketing business. According to its latest SEC filing, $132.4 million of that went to the company for "working capital and general corporate purposes." much of the rest of it was paid out to the company's executives--a huge red flag for investors. In fact, Groupon's co-founder and executive chairman, Eric Lefkosky, along with his wife, took home over $319 million of those proceeds. Former executives and directors also walked away with millions of dollars and Groupon CEO Andrew Mason took a $10 million payout. But even with the prospect of big paydays, the company has had trouble holding on to executives. Conclusion Groupon will be lucky to have a $10 billion valuation when it goes public. That comes just a week after the Wall Street Journal reported, citing IPO analysts, that Groupon will likely be valued between $5 billion and $10 billion. But when will they actually go public? The company reportedly planned on a September IPO, but after the market started to turn sour, Groupon changed its plans. The Times then reported that they would go public late this month or early next month, but Groupon has so far not confirmed that claim.

Have Groupon Gone to far?
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