Is Groupon a great deal?

Analyst: Groupon IPO valuation not 'rational math' - chicagotribune.com: "Chicago-based Groupon, the largest online coupon company, may be worth billions of dollars less than its recent initial public offering filing suggests, e-commerce analyst Sucharita Mulpuru estimated on Wednesday.

Mulpuru, of Forrester Research, warned investors against investing in the IPO and said future share offerings from social-networking companies like Facebook will be wiser investments.

'There is no rational math that could possibly get anyone to the valuation Groupon thinks it deserves,' the analyst wrote in an open letter to potential investors. 'This IPO game isn't about finding value, it's about finding a greater fool who actually believes the valuation is true. Trust me, you will be the fool.'

A Groupon spokeswoman declined to comment on Mulpuru's letter.

Groupon filed to sell shares to the public last week, saying it hoped to raise at least $750 million. The document disclosed surging sales, but also high marketing costs that have so far left the company losing money.

Despite being currently unprofitable, the IPO may value Groupon at $20 billion or more.

Forrester's Mulpuru questioned that valuation on Wednesday, arguing that Groupon may be worth closer to $2 billion."