The initial public offering of Groupon stock happened today with great notoriety. Traders and onlookers were kept in suspense, as the shares did not begin trading until mid-morning instead of the start of the session. Next thing you knew, the shares were up 50% on the day. They cooled off as the day went on, but retained a lot of the jump. One early-stage investor that put $4.8 million into the enterprise in 2007 now has a $2.28 billion-dollar stake. Not bad!

Groupon raised $700 million through the offering, making it the largest IPO of an Internet-based company since Google in 2004. My memory takes me back another five years, when I was first a law firm associate and Internet attorney in 1999. At the height of the dot-com boom then, about the only due diligence investors were conducting was confirming the target e-commerce company had a website. The valuations for companies had no basis in fact or reality, and no correlation to demonstrable revenue. It wasn’t too long before the smoke cleared and the dot-com implosion followed.

The Groupon IPO was preceded by some hand-wringing that wasn’t occurring in the last century. The CFO was peppered with challenging questions in a CNBC interview midway through the day today. In the past few weeks, there was a lot of discussion, not only about the viability of the share price ascribed for the offering, but whether the offering should be happening at all given some concerns about: the company’s business model; Groupon’s recent performance; a constant supply of new upstart competitors; consumers’ “deal fatigue”; and executive managements comments about financial prospects during what, according to securities laws, should have been the pre-offering “quiet period.”

Many hope that today will be a turning point in the securities markets for Internet companies, prompting an upsurge not seen in the past few years. The rocketing Groupon stock was a spectacle to behold today. Did we learn enough about hype and its effects the first time?

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