NEW YORK — Groupon’s stock sizzled in its public debut Friday despite concerns about its accounting practices ahead of an initial public offering and doubts about the viability of its business model.
The first-day pop for the pioneer of online group discounts was largely expected, though not even a gain of about $4 billion in market value — to nearly $17 billion — could erase lingering questions about its long-term prospects.
In fact, it may have added to them.
Bigger than IPOs for Internet radio company Pandora Inc. and professional network LinkedIn Corp., Groupon’s debut served as an icebreaker for a frozen IPO market.
It further sets the stage for the public debut of online game company Zynga Inc., which is expected in the next few weeks. It’ll culminate next year, with the expected IPO of Facebook, dwarfing them all.
After pricing above its expected range on Thursday, at $20, Group on’s stock rose $6.11, or 31 percent, to close Friday at $26.11. Earlier in the day, it traded as high as $31.14.
Still, analysts remain worried about the risks concerning the company, especially as the stock price increases.
“Until investors see the full profit model unfold over time, expect this stock to be highly volatile,” said Kathleen Shelton Smith, principal of Renaissance Capital, which operates . “The first day of trading is typically more about supply and demand. Fundamentals will take over in the long run.”
Groupon makes money by sending out frequent e-mails to subscribers offering a chance to buy discount deals for anything from laser hair removal to weekend getaways.
