Groupon stock jumps as much as 56% on first trading day

Shares in Chicago-based daily-deals vendor Groupon Inc. jumped as much as 56 per cent on Friday, thanks to great demand following the company's initial public stock offering.

Groupon shares closed at a gain of 31 per cent, but the first day jump in the company's shares paled in comparison to that of professional social networking firm LinkedIn, which went public in May. LinkedIn shares had doubled on the first day of their trading.

The daily-deals giant increased the offering by 5 million shares to a total of 35 million, and priced then at $20 each, above previously announced range of $16-$18.

Groupon raised $700 million form the fresh IPO, making it the biggest IPO by a US Internet company since Google's 2004 IPO that had raised $1.7 billion.

Groupon's IPO is relatively tiny as the floated 35 million shares accounts only for around 5 per cent of the company, which offers discount coupons for everything ranging from spa treatments to nose jobs.

Speaking about the small size of the Groupon's IPO, David Berman from hedge fund firm Durban Capital said, "They wanted to have a decent pop on the stock so they didn't take that much public. They created demand by limiting supply, and they got the pop."

Groupon is now valued at almost $12.8 billion, more than twice what Internet giant Google had offered to acquire the company previous year.