NEW YORK/SAN FRANCISCO The shares of daily deals site Groupon Inc rose as much as 56 percent in their stock market debut on Friday, with at least some of the exuberance the result of the small number of shares sold. 
 
 The shares rose as high as $31.14, or 55.7 percent above the IPO price, in early trading on the Nasdaq, at one point pushing the market value of the company to $19.9 billion. The shares later eased to close at $26.11, 31 percent above their $20 IPO price, giving the company a market value of about $16.7 billion. 
 
 Groupon had the third-highest trading volume on the Nasdaq on Friday, with nearly 50 million trades. 
 
 Groupon sells Internet coupons for everything from spa treatments to nose jobs and is one of this year's most closely watched IPOs. 
 
 The offering, one of the largest in recent years, may be a barometer of investor appetite for IPOs. A strong first few trading days could help other private Internet companies -- such as Angie's List, Zynga and even Facebook -- pursue their own IPOs. 
 
 There is a huge backlog of companies that filed to go public earlier this year. Most put their plans on hold when the stock market slumped in August. Groupon is the first major IPO since then. 
 
 Chief Executive Andrew Mason and Chairman Eric Lefkofsky hugged in Times Square after ringing the opening bell on the Nasdaq. Employees at company headquarters in Chicago donned lime green T-shirts emblazoned with the company's ticker symbol "GRPN" printed in old, ticker-tape-style lettering. 
 
 The company declined Reuters' requests for interviews. One employee in Chicago, who declined to give his name, said workers had been discouraged from speaking to the media. Several uniformed security guards walked the perimeter of the building, keeping an eye on Groupon workers who came outside on their cigarette breaks. 
 
 All of the shares sold in the IPO were new, which means early equity holders may sell a portion of their stake next spring, once the 6-month lock-up period expires. It also means that, for now, Andrew Mason's newly-minted $1.2 billion remains paper wealth. 
 
 Some analysts and investors warn that Groupon's early surge could be a short-term phenomenon and its shares could reverse course and trade down like those of Internet radio station Pandora Media Inc. 
 
 There are still lingering questions about Groupon's business model and about competition from better-funded rivals such as Amazon.com Inc and Google Inc. 
 
 Groupon has lost two chief operating officers in the past year and had to adjust its accounting twice under regulatory pressure. 
 
 "They wanted to have a decent pop on the stock so they didn't take that much public," said David Berman, a consumer technology and retail specialist at hedge fund firm Durban Capital. "They created demand by limiting supply, and they got the pop." 
 
 Michael Yoshikami head of money-management firm YCMNET Investment Committee, agreed. 
 
 "Much of this pop is based on low float. We continue to be concerned about Groupon's model, especially given the low barrier for entry into this space. But it's a familiar name and investors tend to gravitate to familiar names at first," he said. 
 
 On Thursday, Groupon upsized its IPO and sold 35 million shares for $20 each. But that stake amounts to only about 5 percent of the company. 
 
 The $700 million raised was on the larger side for a U.S. IPO, but the 5.5 percent represented the second-smallest share float in the United States in the past decade, according to capital markets data provider Ipreo. 
 
 Groupon was founded in October 2008 and has never been profitable. In the nine months ended September 30, it posted a net loss attributable to common stockholders of $308.1 million on revenue of $1.1 billion. 
 
 A spokeswoman for Deutsche Boerse AG's International Securities Exchange said it expects to list options on Groupon on November 14, with other major exchanges expected to follow suit. Options can be used to bet on the direction of stocks, including a decline. They are often used by traders to hedge stock positions. 
 
 Underwriters on the IPO were led by Morgan Stanley, Goldman Sachs and Credit Suisse. 
 
 (Reporting by Clare Baldwin, Brendan McDermid, Rodrigo Campos, Edward Krudy and Phil Wahba in New York, Alistair Barr in San Francisco and James Kelleher and Doris Frankel in Chicago; editing by Derek Caney, Gerald E. McCormick, Steve Orlofsky and Andre Grenon) ||||| NEW YORK (CNNMoney) -- Groupon is poised to start trading publicly, but the road to an initial public offering for the popular daily deals site has been rocky -- and one that skeptics say is reminiscent of the dot-com bubble. 
 
 Groupon is slated to price its IPO late Thursday and begin trading on Friday morning, according to several news reports. It will trade on Nasdaq under the ticker symbol GRPN. 
 
 
 
 
 
 
 
 
 
 Demand for the stock is expected to be strong, but Groupon has been tarnished by questions surrounding unorthodox accounting measures, revisions of sales figures and scaled-back expectations of how much money Groupon will raise. 
 
 "It's a flashback to the late '90s. We've seen this game before and we know how it's going to end," said Tony Catanach, accounting professor at Villanova University. 
 
 Groupon's IPO has been controversial since it first filed the paperwork in early June. The company drew a barrage of criticism for its reliance on a nonstandard metric that stripped out Groupon's steep costs for marketing and acquiring new subscribers. 
 
 Under pressure from regulators, Groupon re-filed in August to instead use only standard accounting procedures. As a result, the operating profits that Groupon cited in its first filing became operating losses. 
 
 Then, in late September, Groupon revised its reported revenue to "correct for an error" -- namely, including in its revenue the cash it has to hand back to merchants for their share of the coupons Groupon sells. That effectively whacked Groupon's sales in half, to $688 million for the first half of 2011 from the $1.5 billion it claimed previously. 
 
 "All of these amendments and changes are going to make intelligent investors a little skittish," Catanach said. 
 
 Late last month, Groupon dialed back how much it hopes to raise in its IPO by 28% to $540 million. The company is putting 30 million shares up for sale, hoping they'll receive between $16 and $18 apiece. It had originally filed to raise $750 million. 
 
 Several other online companies have gone public this year -- and while they've generally done well on their first trading days, longer term performance is mixed. 
 
 Professional networking site LinkedIn's (LNKD) shares more than doubled in its May IPO, even though the company turned only slight profits in 2010 and 2006, and has otherwise has been in the red every year since its 2003 inception. 
 
 The stock is still trading well above its IPO price of $45, but it is below its first day closing price of $94.25. 
 
 In August, LinkedIn announced it turned a profit on its first quarter as a public company. Analysts were expecting a loss. LinkedIn will report its latest earnings on Thursday after the bell, and analysts are once again expecting a loss. 
 
 Other tech IPOs did well on their first day but then quickly fizzled. Internet radio service Pandora (P) surged more than 60%within the first few minutes of trading, even though the unprofitable company had warned investors that it expected to continue losing money "through at least fiscal 2012." But shares are now trading below the offering price of $16.. 
 
 And shares of Demand Media (DMD), an online content creator that faced its own accounting smackdown, closed 33% higher on its first day. But shares are now trading below $8, compared with the offering price of $17. 
 
 The performance of Groupon's IPO will give an indication of how willing investors are to buy risky companies. Next up is Zynga. The social gaming company filed in June and is expected to start trading later this month. 
 
 Catanach said investors need to be wary of any of Groupon, Zynga or any other new offerings from Internet companies if their stocks surge on the first day. 
 
 "In the 90s we saw these [accounting] concerns put to the side," he said. "There were countless people saying this doesn't make sense, but investors still bought. And look what happened."
– Groupon has raised $700 million in the biggest initial public offering by a US Internet firm since Google's 2004 IPO. The daily deals leader floated some 5% of the firm for $20 a share, above an initial range of $16 to $18, giving the company a market value of around $12.8 billion, Reuters reports. Groupon isn't making a profit, and there have been plenty of questions raised about its accounting procedures, leading many analysts to consider it overpriced. "It's a flashback to the late '90s. We've seen this game before and we know how it's going to end," an accounting professor tells CNN. Others see Groupon, which began trading on the NASDAQ Friday under the ticker GRPN, as a good buy. Groupon "is a company with permission to market to 150 million consumers daily. No other company in the world has ever had that type of reach," said the chief executive of industry tracker DailyDealMedia.