Mutual funds' bet on Groupon tops $1 billion

(Reuters) In less than a year, the combined $375 million bet on Groupon Inc by three U.S. mutual fund companies has turned into a $1 billion-plus hit.

Fidelity Investments, T. Rowe Price and American funds owner Capital Group combined to invest $375 million in Groupon in December, only to see the value of that money more than triple after Groupon's stock market debut on Friday.

In December, the companies participated in a Series G round of funding for Groupon. Fidelity and T. Rowe Price each invested $100 million while Capital Group put in $175 million, according to filings with the U.S. Securities and Exchange Commission.

All told, the three companies received a total of 11.87 million shares of Groupon's Series G preferred stock. On the eve of Groupon's initial public offering, each of those shares converted into four shares of the company's Class A common stock, regulatory filings show.

That gave the companies 47.48 million shares in Groupon. That stock was worth $1.24 billion after Groupon's shares on Friday closed at $26.11 in Nasdaq trading.

Boston-based Fidelity, known for its more than $1 trillion in assets under management, sprinkled its Groupon investment among various mutual funds. Its $70 billion-plus Contrafund, for example, held about 17 percent of Fidelity's Series G investment.

Groupon shares on Friday rose as high as $31.14, or 56 percent above the IPO price.

(Reporting by Tim McLaughlin in Boston)