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Groupon Valuation Lower Than Anticipated

Groupon's valuation has dropped from earlier projections.

Technology companies have topped the list in recent quarters when it comes to initial public offerings that pull in a high valuation, but one of the most watched IPOs is taking a hit as it prepares to sell shares.

Before it started the process of selling shares, analysts were predicting Groupon would be valued at up to $30 billion, but volatile markets and some doubts about its accounting processes have pushed the valuation much lower, to $12 billion, The New York Times reports.

Doubts about whether Groupon's business model is sustainable and some negative feedback from customers have also plagued the organization, according to the source. But it still has a large membership - 115 million subscribers - and managed to pull in $688.1 million in revenue in the first half of 2011, the newspaper says.

According to Bloomberg, Groupon's actual offering - which was pushed back due to market turbulence and investigations from regulators about how it did its accounting - would be less that one-tenth of its valuation

Groupon is not alone, as the Times notes other companies that are getting ready to launch their own IPOs are also struggling with a cold reception from investors.