SAN FRANCISCO – Groupon Inc.’s stock fell below its initial public offering price for the first time as investors reassess the challenges facing the still-unprofitable company in a shaky economy.

The shares plunged $2.79, or 14 percent, to $17.28 in early afternoon trading Wednesday, below Groupon’s IPO price of $20, which was set less than three weeks ago. The rapid fall from Wall Street’s graces occurred almost entirely this week. Groupon has shed one-third of its market value since the end of last week to wipe out nearly $6 billion in shareholder wealth.

Congress’ inability to reach an agreement on how to reduce the U.S. deficit has raised the specter of automatic cuts and tax increases, which would increase the risk of another recession. That reduces Wall Street’s appetite for risky investments such as Groupon, which is facing increasing competition in the rapidly growing niche of online advertising that it pioneered.

The decline also has been deepened by a skeptical class of investors, known as short sellers, who bet that certain stocks are going to slide. They do this by borrowing shares that they immediately sell, hoping they can repay the stock by buying at a cheaper price later.

Groupon gets merchants to offer steep discounts to large clusters of consumers, a concept that turned it into one of the world’s fastest growing companies.

Founded in 2008, Groupon is on pace to generate more than $1.5 billion in revenue this year, mostly from commissions it gets from deals sold. Google Inc., which runs the Internet’s largest advertising network, had annual revenue of just $86 million at the same stage of its existence.

Unlike Google, though, Groupon has amassed huge losses as it tries to expand and ward off threats from copycats. The competition includes Google and another Internet powerhouse, Inc., which is backing a startup deals company called LivingSocial.

Through the first nine months of this year, Groupon lost $308 million, partly because its payroll swelled to more than 10,400 employees to help persuade merchants to offer deals. Groupon’s losses and massive work force provide another stark contrast to how Google went about its business as it was starting out. After three years, Google had fewer than 300 employees and eked out a $7 million profit.

As it prepared its initial public offering of stock, Groupon tried to sugarcoat the losses by emphasizing an accounting approach that securities regulators eventually required the company to abandon.

Some merchants have become skeptical that partnering with Groupon and similar services is really a deal for them. Groupon takes up to half the price of the coupon, so if an Italian restaurant is offering $50 worth of food for $25, the merchant gets just $12.50.