Groupon Shares Priced at $20 Ahead of IPO

Kara Swisher ahead of Groupon's IPO tomorrow:

Groupon has priced it shares for its public offering at $20 a share, several dollars above the expected price range.

The offering for the daily deal site — which has had a controversial IPO process — was more than 10 times oversubscribed, meaning there was more demand than supply of its stock.

To alleviate the difference, Groupon added five million more shares to its offering, totaling 35 million shares sold.

The company is set to go public tomorrow under the GRPN ticker on the NASDAQ.

I don't recall reading anything even remotely positive regarding this IPO.

On the purported decline of Netflix

Netflix's market cap may have fallen from $15 billion to $4 billion in a matter of months, but that is not to say the company is a dying prospect.

In realistic terms, Netflix's business model has undergone very few changes in the past few months. Despite the Qwikster misfire, and the preceding increase in pricing, Netflix exists just as it did in early-2011 (aside from several sizable content gains). The company offers a huge streaming library, and is openly beginning to focus upon that portion of the business. With rising internet speeds, and the inherent cost of physical media, the rise of streaming is an entirely expected outcome.

Of course, as with any change, there is an element of fear. People aren't necessarily ready to embrace this shift. Some do not grasp the basic concept of streaming. So a loss of 800,000 subscribers? That seems about right. 

But Netflix is building for the future. Why support a costly legacy format when the company can prioritize and expand its streaming clout? 

So, with regard to the 35 percent decline in stock price, Wall Street seems to have missed the point, and opened an opportunity for any forward-looking investor to take advantage. Netflix has an ever-growing library, the company's gaining independent content, and their library is accessible on just about every device possible (and growing). Moreover, the company has a stranglehold on streaming rights for some of today's most popular shows (e.g., Mad Men) for at least the next two years. Even with the reported threat of upcoming streaming sites like Vdio, Netflix is fairly untouchable. 

Companies all too often hamstring their business by straining their bounds to support legacy products and formats. Of course, there is the inevitable knee-jerk response to change, but in the long-run, it is always beneficial to be ahead of the curve. Apple is extremely well known for this sort of behavior. The difference between Apple and Netflix? Netflix made a very public mess of their handling of change. 

At the end of the day, Netflix is not going away. It has an enormous library, it is available near ubiquitously on modern devices, and its prices make their offering practical. With their stock sitting at around $75 (down from close to $300 in July), it seems much more of a bargain than it is an indicator of failure. To call it anything else would be short-sighted.