Editor's note: This story was updated at 4:50 p.m. to reflect the closing price of the stock.

The deal is definitely on for Groupon. As anticipated, the daily deal pioneer went public with a pop, with its stock debuting at $20 and surging as much as 56 percent, to $31.14, before swinging back to below $30, trading at $27.47 per share as of 3:11 p.m. It slipped to $26.11 per share by the market close.

Andrew Mason, the company's chief executive officer, in New York for the initial public offering, was clearly delighted at the company milestone. "With our IPO behind us, I couldn't be more excited about what lies ahead," Mason said in the company blog.

What lies ahead is definitely in the minds of investors too. Before the market opened, Groupon had already raised $700 million in its initial public offering—almost a third more than it initially sought—by selling 35 million shares at $20 apiece, according to data compiled by Bloomberg. That put the daily deal company's valuation at nearly $13 billion, making it the biggest Internet IPO since Google raised $1.9 billion in its 2004 initial offering.

Groupon is floating just above 5 percent of the company, and that mere sliver of an offering upped the demand even before the stock hit the market. As expected, the institutional investors flipped those shares fast after the stock debut today, walking away with some tidy profits and, perhaps, not looking back.

Anthony Catanach Jr., an associate professor in the School of Business at Villanova University and one of the authors of the Grumpy Old Accountants blog, has been watching Groupon with a critical eye and says he is not surprised at the increase today.

“My problem is that I’ve got enough gray hair that I remember the dotcom bubble, and it doesn’t surprise me that it came out the way it came out,” Catanach told Portfolio.com. “The investment banks are very good at what they do. They’re very compensated, so they have every incentive to make this a success.”

Groupon's financial condition has definitely been an issue on the run-up to the IPO. After its launch three years ago in Chicago, Groupon and its founder Mason became rock stars of the Internet startup world. There are numerous imitators now, but Groupon pioneered the market for deep discounts at local restaurants and stores, and grew its subscribers and revenues at head-turning rates. Now a global company, the site boasts 142.9 million subscribers, according to its latest filing, seven times as many as it had in 2010. As of the third quarter, about 29.5 million of those people had purchased at least one deal.

But the golden glow around the company has been fading since it filed its first prospectus with the Securities and Exchange Commission, revealing not only that it is not making any money, but also an unorthodox accounting method that ultimately forced the company to revise its revenues downward and unusually high marketing costs to acquire new customers (which is not so cheap anymore, thanks to all the Groupon clones).

Today, though, the mutual funds bought into the stock, knowing that if they don’t buy Groupon, they might find it hard to get the next hot tech stock, such as Facebook, said Catanach.

“If you’re a growth fund manager, it’s very difficult not to go out and buy some of this,” he said. “It’s an old selling tactic that the investment bankers have used for decades. If you want in on the next deal, you have to get in on this one. You don’t get to just pick and choose.”

His question is how Groupon will fare when it tries to do stock offerings after this one, and whether the extrapolation that the company is now worth some $13 billion is a fair one since it’s based on the stock price today, with a limited number of shares available. “Going forward they’re going to have to prove that they have a business model that’s viable,” he said.

Boyan Josic, chief executive officer of Daily Deal Media, thinks Groupon’s innovative business model is why investors bought into the stock today.