Actually they can, and yes they are bleeding cash and yes they are 'upside down' in the parlance, but if they lower the offering price and still can't get it fully subscribed they are stuck. They can go back to their investors for a bridge loan, or issue warrants, or try another private (probably down) round.
Two very interesting things have come out of Groupon's history so far, the first is that they turned down a $6B buyout (which seemed amazing to me at the time) and then they did a fund raise where most of the stock was insiders selling.
That particular combination makes me wonder if the buyout was rejected because the way money would have been shared around was stipulated by previous term agreements, and some of the investors didn't want that, so they did the series D or what ever it was which allowed them to funnel money to specific investors, so that now if they take a hair cut on valuation those investors are 'protected.'
So the fact that they are bleeding cash will force some sort of financial transaction to occur (buyout, bridge loan, chapter 11 bankruptcy), if they are having a hard time getting the offering fully subscribed they may be shopping the company around, and if they are doing that they are in a much weaker position than they were before.
Two very interesting things have come out of Groupon's history so far, the first is that they turned down a $6B buyout (which seemed amazing to me at the time) and then they did a fund raise where most of the stock was insiders selling.
That particular combination makes me wonder if the buyout was rejected because the way money would have been shared around was stipulated by previous term agreements, and some of the investors didn't want that, so they did the series D or what ever it was which allowed them to funnel money to specific investors, so that now if they take a hair cut on valuation those investors are 'protected.'
So the fact that they are bleeding cash will force some sort of financial transaction to occur (buyout, bridge loan, chapter 11 bankruptcy), if they are having a hard time getting the offering fully subscribed they may be shopping the company around, and if they are doing that they are in a much weaker position than they were before.