Living Social Planning Its Own IPO

July 11th, 2011 at 5:29 pm

The tech bubble is ever so growing. Investors are increasingly looking at tech companies for investment opportunities. This gives the tech industry a wonderful opportunity as well to cash in on some much needed capital brought about by renewed interest on tech. For some, planning an IPO is the best way to go.

During the recent months, several tech companies have already gone through filing for their IPO papers. The likes of daily deals site Groupon and social gaming giant Zynga have already filed for their IPO papers. One of those that may be joining their ranks is another daily deals site, Living Social.

Living Social another popular daily deals site and one of the major competitors of Groupon, is also close to setting up its own IPO. It is reportedly in talks with several investment banks to handle the the planned IPO. In fact, according to The Times, Living Social has already hired Bank of America Merill Lynch, Deutsch Bank and JP Morgan Chase to broker its upcoming IPO.

Living Social bosses have talked with the bankers about the possibility of raising from $700 million to $1 billion on the said IPO. With such amounts being floated, it could give the tech company a valuation ranging from $10 billion to $15 billion. That is quite a value that would surely get the attention of investors.

Living Social may be planning to take advantage of the recent interest on tech stocks and will try to enter into the game in order to raise some much needed capital. With more and more investors now becoming more open to investing in start ups, now may be the best time for tech companies to consider going public. Living Social may be hoping for a successful IPO similar to what LinkedIn went through recently.

LinkedIn, one of the more notable tech companies that have recently conducted a successful IPO, have seen its stock price more than doubled after it started trading publicly on the New York Stock Exchange. This avid reception on the stock market somehow served as a benchmark for some tech companies to also consider going public. And because of it, there are now reports indicating that even Facebook, currently the most popular social networking site in the world, may also be considering going public.

But more than a successful IPO, it might take more for tech companies to flourish in the stock market and somehow justify their worth to the investing public. Investors usually look for longevity when it comes to seeking long term investments. If companies like Living Social will not be able to justify their extremely high valuation after going public, there are many chances that these companies may fizzle out in the long term. And if these happens to several tech companies, then there might be a big chance that the current tech bubble would burst and go bust.


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