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Last week saw both Pandora and Groupon file their S-1 documents, meaning they are now on track for an IPO. While many have anticipated IPOs in the tech industry, I believe I’m right in saying that they still managed to surprise many in doing so. Pandora is looking to raise $142 million and Groupon is officially looking for $750 million, but WSJ reports that the company might be looking for as much as $1 billion.

What strikes me as interesting in these filings is not that they’re actually happening, but the state of the companies doing them, Groupon especially. It brings back memories from the 90s when everyone and your mom were filing for an IPO.

Groupon has been titled as the fastest growing company in history, by revenue. It is impressive and there’s no question about it. In the financial year 2008 the company made less than $100 000 in revenue. In 2010 the company turned over some $713 million. Some growth.

However, while the company is the fastest growing in history and turns over close to a billion dollars, it’s doing so at a loss – by some standards. David Heinemeier Hansson wrote a blog post that for every $1 Groupon makes, it invests $1.43 to make it happen.

Furthermore, Groupon recently raised a billion dollars in financing and used that cash to pay off its early investors and founders. I’m sure the investors that poured the billion dollars into the company are looking to get their money back in the IPO. Sounds a bit like the “greater fool” -theory to me.

While it may be a healthy sign that companies are going public, I think we still need to be critical of the condition they are going public in. Otherwise it won’t be sustainable and we’ll see another 2001 crash in a few years time.