Shares of daily deals site, Groupon, Inc. (Nasdaq: GRPN) surged nearly 50 percent in its debut on the Nasdaq on Friday. Groupon shares touched a high of $31.14 in morning trading on Friday up from its IPO price of $20 per share.
The company on Thursday sold 35 million shares for $20 each, raising $700 million. It had filed with the U.S. Securities and Exchange Commission to sell 30 million shares for $16 to $18 each.
The three-year-old company is one of this year’s most hyped IPOs, and has one of the smallest floats of the past 10-years — slightly more than 5 percent of the company.
“Groupon is expensive. The $12.8 billion valuation is only achievable because of the low float,” Rob Romero, head of technology-focused hedge fund firm Connective Capital Management told Reuters.
At $12.8 billion, Groupon’s price tag is more than two-times what Google offered for the company last year.
Groupon “is a company with permission to market to 150 million consumers daily. No other company in the world has ever had that type of reach,” Boyan Josic, chief executive at DailyDealMedia, which tracks the industry, told Reuters.