Groupon

[Surfah]

So much for City Deals. Lawsuits right and left.

This is the same reason that Groupon is in trouble. The Forbes article I linked said they need the IPO just to survive this year.

[TripletDaddy]

This is the same reason that Groupon is in trouble. The Forbes article I linked said they need the IPO just to survive this year.

Well, with articles like this, good luck with the IPO I guess.

If I were a groupon customer and currently possessed any coupons, I would redeem them ASAP before vendors start rejecting them.

[Surfah]

Well, with articles like this, good luck with the IPO I guess.

If I were a groupon customer and currently possessed any coupons, I would redeem them ASAP before vendors start rejecting them.

Like I said, the movie tickets I got through Groupon weren't honored. But fortunately Groupon gave me my money back. I have had a similar experience with restaurant.com. Except they just gave me credit to buy more certificates.

[HuskyFreeNorthwest]

Does it depend on the area how good Groupon is? It seems that round these parts more deals are on livingsocial.

[Surfah]

Does it depend on the area how good Groupon is? It seems that round these parts more deals are on livingsocial.

I subscribe to DC and Richmond, VA for both. And they're equally terrible. Most deals are for new restaurants or spas that nobody has ever heard of.

[filsdepac]

The deals I've purchased have been pretty good and all worked well. Having said that, I agree they could be in trouble with all the competition, a $10-$11 billion dollar valuation is just ridiculous. Not sure who the bankers are, but if they can pull this off on their road show, that will be an incredible feat.

[Flystripper]

Groupon is located in my building in CHicago. Based purely on the people they have working there I would sell short.

[wuapinmon]

We got season passes to the Biltmore House in Asheville for $75 on Groupon. Regular price was $125, and I've been watching them for years, and there are no discount passes.

[Parrot Head]

I meant to post this last week, but didn't (obviously). Seeing as how Groupon sold at $20/share, even above the generous initial talk of 16-18 and that it's now around $26, I thought I'd jump back and post it.

The article was Groupon Prices IPO at $20 a Share in the WSJ and I found a couple of the comments insightful. Most of the comments were bashing the IPO and shared the sentiments posted here. These are definitely more detailed than my own feelings, though in the same vein and it just surprises me that people would jump on this company so willingly.

William Brown replied:

I don't think investors, per se, are "overvaluing" Groupon ... I think it's a strict function of flippers (who the mainstream financial media would prefer call "investors") placing orders for Groupon stock that far-exceeds the available float, which has been noted throughout this IPO fiasco as being "rediculously small" (even by LinkedIn IPO benchmark).

Afterall ... I don't believe true "investors" would consider a purchase of $19 or higher Groupon stock an "investment", when one considers almost all the recent capital raised was *NOT* used to "grow" this business nor erect defensible barriers to entry amid a sea of "me-too" competitors, but instead to line the pockets of the original founders of the company -- while continuing to pay a growing line of "ex-executives" who got to keep OUTRAGEOUS compensation for mere months of "showing up at the office" (such as the woman who left Google to join Groupon only to QUIT 5 months later).

This entire IPO episode -- with its "quiet period" violations and FANTASTICAL accounting gimmicks (requiring restatements and just plain old "conformance to generally accepted accounting principles") -- show Wall Street and capitalism in their WORST POSSIBLE LIGHT.

Should Groupon trade at $40 or higher 6 months from now, it will only be because NO ADDITIONAL SHARES have been sold, thus keeping the float pathetically small and artificially propping up the price.

Meanwhile, it would have to accomplish that feat while continuing to CUT BACK ON MARKETING EXPENSES, which as we've recently seen have a very NEGATIVE impact on new "user" (is "customer" the right term here?) acquisition.

A terrible chapter in dubious Internet business models continues, certainly to be chronicled in the next update to "Fuc.edCompany.com" (the book or RIP web site, for those of a "certain age" old enough to remember it!)

Guilhem Tardy wrote:

If "independent analysts such as Morningstar Inc. have valued Groupon at as little as $5 billion", this is for a good reason. Actually, many reasons:
1- poor execution in several key international markets (e.g. ranked #10 in China, #4 in India)
2- fierce competition encouraged by an easily replicable business model
3- a dual-class share structure
4- dubious reasons behind this IPO

Fundamental analysis (assuming Groupon's withdrawal from China and a quick turnaround in other international markets) brought me to a valuation of $4.8 to $6.2 billions ($8.22 to $10.25 per share), which is still at a premium compared to some other companies such as eConversions (in the UK).

There will always be a debate on the "value" of a company, but I can't resist to give you an extract of my report on the latter two items listed above:

<< A notable risk to public investors comes from the dual-class share structure designed for Groupon's founders to continue controlling the company with 58.1% of the voting power, yet less than 35% of the outstanding shares. In our opinion, this fosters poor corporate governance and should have been avoided.

We also question the reasons behind this IPO. Groupon stated that net proceeds of this offering will not be used to fund operations during the next 12 months. About 85% of the $1,113 million from past private sales of common and preferred stock were used to redeem shares, hence the press's accusation that Groupon is a Ponzi scheme. We expect this IPO to serve the same purpose of transferring wealth from new public investors to existing stockholders. The fact that very little equity is made available to public investors - a common way to maintain a steep valuation in an IPO - reinforces that sentiment. >>

[RC Vikings]

Shares of Groupon (GRPN), which soared 40% two weeks ago during the daily deal site's IPO, continued to crater on Wednesday.



The stock was losing 12% to $17.58 in afternoon trading. The session low is $16.84. Volume continued to be elevated with more than 5 million shares changing hands by midday. Wednesday's decline follows a 15% drop on Tuesday.



Groupon's fall comes amid a broader decline in buzzy Internet stocks like Pandora (P -7.37%) and LinkedIn (LNKD -3.62%). Shares of Pandora were down 6% despite beating third-quarter earnings on Tuesday (and had been down by as much as 11% earlier on Wednesday), while LinkedIn was sliding 3.3%.



"The market is throwing out anything with high risk and uncertainty, including companies that don't have a lot of operating history," said Daniel Ernst, an analyst with Hudson Square Research.

They should have taken the deal.

[Surfah]

Groupon is complete crap these days. I only use it for the deals on local golf courses. But I may take my name off their mailing list now after one of the local golf courses sent out an email saying they won't be offering Groupons anymore after a discussion with club members and vote.

The offers I get here in NoVA/DC are worthless.

[Katy Lied]

The offers I get here in NoVA/DC are worthless.

Here in Utah they are crap as well. Every groupon is for pedicures, brazillian waxes, laser hair removal, and facial skin treatments. They never offer any products anymore- just services. And when I do buy a massage, the spa is inundated with groupons, and the soonest I can get a massage is 8 weeks out.

[scottie]

Here in Utah they are crap as well. Every groupon is for pedicures, brazillian waxes, laser hair removal, and facial skin treatments. They never offer any products anymore- just services. And when I do buy a massage, the spa is inundated with groupons, and the soonest I can get a massage is 8 weeks out.

I must have been late to the Groupon party... what were some good things they offered previously in Utah?

restaurant.com is a pretty good site for restaurant discounts.

[TripletDaddy]

Here in Utah they are crap as well. Every groupon is for pedicures, brazillian waxes, laser hair removal, and facial skin treatments. They never offer any products anymore- just services. And when I do buy a massage, the spa is inundated with groupons, and the soonest I can get a massage is 8 weeks out.

put your husband to work!

[falafel]

Groupon has a 2 for 1 deal on AMC movie tickets today.

http://www.groupon.com/deals/amc-the...c-theatres-nat