Workers at computers at Groupons international headquarters on June 10, 2011 in Chicago, Illinois. [CFP]

U.S. online discount firm Groupon is planning to go ahead with a scaled-down initial public offering in the wake of increased market volatility and a series of wrong decisions by company executives, a source close to the issue said.

The source revealed that Groupon was expected to launch a listing within two weeks expected to raise US$500-700 million, nearly 10 percent less than earlier plans, and will value the company at US$12.5 billion.

A previous report said Groupon would stage an IPO road show targeting investors on Monday or Tuesday next week.

The shrinking size of the IPO means that Groupon will cut the amount of shares to be sold with the hope of selling more shares at a higher price in the future, an approach similar to that used by Zillow and LinkedIn.

At the end of September, Groupon slashed revenue statements in its IPO filings by half to meet a special accounting rule required by the U.S. Securities & Exchange Commission. Its chief operating officer Margo Georgiadis resigned from the company last month.

China's business press carried the story above on Thursday.