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(CNN)   Groupon will need 1,000 people for this $750 million IPO offer by 10pm tonight   (money.cnn.com) divider line 26
    More: Unlikely, groupon, IPO, ticker symbol, Kara Swisher, Credit Suisse, files  
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1279 clicks; posted to Business » on 02 Jun 2011 at 6:30 PM (3 years ago)   |  Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2011-06-02 06:36:30 PM
Groupon filed on Thursday to raise as much as $750 million in an initial public offering, revealing a short history filled with skyrocketing sales and steep losses.


This is a repeat from 1999.
 
2011-06-02 06:45:57 PM
I've signed up with Groupon since November or so. There were two deals I was somewhat interested in, the rest were utter crap. I have no interest in paying $10 for $20 worth of Pilates classes 45 minutes from my house.

$15b valuation? 1999 is right.
 
2011-06-02 06:54:49 PM

PowerSlacker: Groupon filed on Thursday to raise as much as $750 million in an initial public offering, revealing a short history filled with skyrocketing sales and steep losses.


This is a repeat from 1999.


I am so tempted to buy their IPO, sit on it 3 or 4 days and sell. I see no distinct reason to own the stock other than the short run up it will receive in the week after its IPO. The problem is that if I, a random Farker with just enough knowledge of the market to be stupid, thinks this, then what must everyone else think? That then leads me to believe everyone else is thinking the same thing at the very least, and that I must avoid the stock entirely.
 
2011-06-02 06:57:43 PM

PowerSlacker: Groupon filed on Thursday to raise as much as $750 million in an initial public offering


That'll buy a whole bunch of aeron chairs and foosball tables.

/which will be available to the public cheap from the bankruptcy trustee in 2013.
 
2011-06-02 07:01:05 PM

Sun Worshiping Dog Launcher: I am so tempted to buy their IPO, sit on it 3 or 4 days and sell


Look at the chart for LNKD before you do that.

The only people who will get paid from the Groupon IPO are those who have shares before the stock is available to the general public.
 
2011-06-02 07:05:00 PM
Groupon is a sucker's bet.
Google is gonna bury them within the next couple of years.. just watch.
 
2011-06-02 07:11:23 PM

Sun Worshiping Dog Launcher: PowerSlacker: Groupon filed on Thursday to raise as much as $750 million in an initial public offering, revealing a short history filled with skyrocketing sales and steep losses.


This is a repeat from 1999.

I am so tempted to buy their IPO, sit on it 3 or 4 days and sell. I see no distinct reason to own the stock other than the short run up it will receive in the week after its IPO. The problem is that if I, a random Farker with just enough knowledge of the market to be stupid, thinks this, then what must everyone else think? That then leads me to believe everyone else is thinking the same thing at the very least, and that I must avoid the stock entirely.


collider.com

Unless everyone is thinking the same way - that everyone will avoid the stock in the early days - in which case you'd be a fool not to buy in!
 
2011-06-02 07:14:37 PM

Kraftwerk Orange: Unless everyone is thinking the same way - that everyone will avoid the stock in the early days - in which case you'd be a fool not to buy in!


www.behaviorgap.com
 
2011-06-02 07:17:45 PM

Debeo Summa Credo: I've signed up with Groupon since November or so. There were two deals I was somewhat interested in, the rest were utter crap


Depends where you live. I live in New Orleans and the offers are absolute crap. There's just no interest I guess.

My sister lives in Chicago and finds some pretty cool deals all the time.

I'm no fan of it either way, just sayin'.
 
2011-06-02 07:19:07 PM

Sun Worshiping Dog Launcher: I am so tempted to buy their IPO, sit on it 3 or 4 days and sell. I see no distinct reason to own the stock other than the short run up it will receive in the week after its IPO. The problem is that if I, a random Farker with just enough knowledge of the market to be stupid, thinks this, then what must everyone else think? That then leads me to believe everyone else is thinking the same thing at the very least, and that I must avoid the stock entirely.


Speculation is never a good investment "strategy".
 
2011-06-02 07:40:55 PM
This is just a farked up IPO.

First of all, you can't just get the IPO and sit on it for 3 or 4 days and sell it. There's a required holding period as a condition of the IPO.

Second of all, most of these IPO movements are misleading. They set the target so low, $750M, and then "hope for" $15B or even $25B, and call it a success when it gets that high. Bullshiat. The problem is you're not allowed to short an IPO stock early on - that means there's no downward, corrective pressure on the price per share.

And GroupOn, as a long-term business model, is hugely flawed. Its market has no barrier to entry - there are already new competitors by the day (BuyWithMe, TravelZoo, LivingSocial, Yelp, etc). You don't need large assets to do this, just a site, an email system, and a couple of energetic networkers who have good local focus, and capture one local market at a time. Over 50% of GroupOn's revenues come from overseas - it's only a matter of time that out-of-work programmers in other countries figure out what GroupOn is up to and imitate the business model. Then POOF, revenues go down fast. Nothing's stopping them, especially if they can offer better profit-sharing contracts to vendors to undercut GroupOn. And with the smaller overhead a start-up will incur, you bet that will happen.

GroupOn realized a $147M loss in Q1, and its SG&A is quite high - about $179M/Q1 (or 28% of revenue, which is $644M/Q1). Marketing is also quite high - $208M/Q1 (32% of revenue), and it does not seem like GroupOn will benefit much from any scale of economies that much to control costs (i.e. they have limited fixed costs, mostly variable costs).

I think people are tying the IPO valuation too much to the very amazing revenue growth that GroupOn had from 2007 ($70K) to now ($644M in Q1), without thinking too much about the underlying business model itself or how GroupOn will control costs in the long run. Money attracts money, there will be tons of new competition soon, and GroupOn will fizzle out.

This stock will be a dud. But the IPO will be great - if you can grab on and then sell it quick.
 
2011-06-02 08:46:09 PM
Read that again: FACE value of the coupons sold.

That 713 million dollar "revenue" actually translates into less than 200 million dollars in actual money. (or less)

The math sucks for businesses that Groupon tries to get into it's program.

Why on earth would I offer $100 in services for $50 and receive $25? Receiving 25 cents on the dollar is a sure-fire way into the poorhouse. Groupon and the like try and convince the businesses that they are creating a database. (sure, a database of one-time customers who will never pay full price for the service you offer ever again)
 
2011-06-02 09:16:38 PM

BunkyBrewman: Why on earth would I offer $100 in services for $50 and receive $25? Receiving 25 cents on the dollar is a sure-fire way into the poorhouse. Groupon and the like try and convince the businesses that they are creating a database. (sure, a database of one-time customers who will never pay full price for the service you offer ever again)


They might grab a few loyal customers, and it is free money for the unredeemed groupons (figure I've seen for groupons is about 20% unredeemed)
 
2011-06-02 09:36:33 PM

The Bestest: Groupon is a sucker's bet.
Google is gonna bury them within the next couple of years.. just watch.


I think you meant Facebook. Google doesn't have the "friending" aspect needed to make a "better" Groupon like FB does.
 
2011-06-02 09:42:21 PM
Let's see:

* Company has only been around a couple years: check
* Business model that can be easily copied: check
* Dozens of "me too" clones: check
* Competition from existing players that are already profitable: check
* Business model will fail if economy changes: check

Yes folks, what we have here is not a wise investment. It's tech bubble 2011 edition.
 
2011-06-02 09:59:44 PM
Not selling to Google was the dumbest thing they ever did.
 
2011-06-02 10:21:27 PM
Instead of groupon, join dealery.com. They aggregate all the deals (GroupOn, dailydeal, livingsocial, etc) in one email.
 
2011-06-03 12:58:44 AM

The Bestest: Kraftwerk Orange: Unless everyone is thinking the same way - that everyone will avoid the stock in the early days - in which case you'd be a fool not to buy in!


www.behaviorgap.com

Those are the guys that end up drinking their own poison, right?
 
2011-06-03 01:52:23 AM

INTERTRON: Sun Worshiping Dog Launcher: I am so tempted to buy their IPO, sit on it 3 or 4 days and sell. I see no distinct reason to own the stock other than the short run up it will receive in the week after its IPO. The problem is that if I, a random Farker with just enough knowledge of the market to be stupid, thinks this, then what must everyone else think? That then leads me to believe everyone else is thinking the same thing at the very least, and that I must avoid the stock entirely.

Speculation is never a good investment "strategy".


Never? really?
 
2011-06-03 04:44:50 AM

jutm543: Not selling to Google was the dumbest thing they ever did.


Utterly senseless on their part. The schaudenfreude (or however you spell it) is strong with this one
 
2011-06-03 07:26:29 AM

Sun Worshiping Dog Launcher: I am so tempted to buy their IPO, sit on it 3 or 4 days and sell. I see no distinct reason to own the stock other than the short run up it will receive in the week after its IPO. The problem is that if I, a random Farker with just enough knowledge of the market to be stupid, thinks this, then what must everyone else think?


Everyone else is thinking the same thing you are thinking, so they plan to sell a day or two before you.
 
2011-06-03 10:19:22 AM

12349876: They might grab a few loyal customers, and it is free money for the unredeemed groupons (figure I've seen for groupons is about 20% unredeemed)


Once again, read page 19 of the IPO document:
http://www.sec.gov/Archives/edgar/data/1490281/000104746911005613/a2203913zs-1 .h tm

The company is required to pay back all of those "unredeemed" "coupons" for 5 years. And in some states, forever. And the government can jump in at any time and demand that they (the company) pay them ALL back immediately. Not just a few at a time.
 
2011-06-03 10:30:13 AM

jutm543: Not selling to Google was the dumbest thing they ever did.


They did Google a huge favor by not agreeing to that sale. That goog offered $6bn for Groupon really shook my confidence in them. $6m is closer to being a good deal.

Sheesh, Google, let Microsoft piss away their stash on losers like Skype, but you oughta know better.
 
2011-06-03 12:18:02 PM

The Bestest: Google is gonna bury them within the next couple of years.. just watch.


Hell, Amazon's on the path to burying them right now with LivingSocial.
 
2011-06-03 02:10:47 PM
I wrote into groupon asking when they'd setup a deal on say a civic, or corolla, fit, whatever. I got a response that said something like "hey, thanks for asking, we'll get back to you." never got back to me, but it left me wondering whether it's in the works or not.

Imagine bob the car salesman hits his quota freakishly early in a month, and pulls the trigger on 200 brand new corollas sold at 10 or 12K a pop.

aside from all that, I'll be able to join the ipo for groupon, [it probably won't trade/open for 3 to 4 months according to broker, but who knows]. 3 months time is plenty to see where this face-bubble™©® could be headed.

Probably only in for 100 shares, sell into the open. But yea, if it's this obvious, there are many more ways in which the underwriter's [GS, etc] can juice the hell out of it.
 
2011-06-03 10:54:31 PM
The Banana Thug 2011-06-02 07:40:55 PM
This is just a farked up IPO.

First of all, you can't just get the IPO and sit on it for 3 or 4 days and sell it. There's a required holding period as a condition of the IPO.


Farked for who? All the original investors get a much lower stock price and no matter what barring disaster will make money
 
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