Groupon IPO Today
- Thread starter nickCR
- Start date
So sad... This surprise IPO is a dead giveaway that they know their biz model is going downhill fast and they are not sustainable.
How investors didn't pick up on that just shows you that there is tons of money to be made still in the stock market.
How investors didn't pick up on that just shows you that there is tons of money to be made still in the stock market.
Yo Ima like be watching this stock then cause for my virtual stock exchange for my marketing class. been had shorting on that account.
100G* to 143G in like a month cuz i been had short selling skills.
*leveraged as fuck yo, jk, only 2:1
100G* to 143G in like a month cuz i been had short selling skills.
*leveraged as fuck yo, jk, only 2:1
I've been paying distinct attention to Groupon for the past 12-15 months, since I attempted to start up my own daily deals site last year.
The fact that their operating expenses are so high is going to kill them. They are trying to be everywhere at once which may be impossible. Also, their margins are currently 50%. Their main competitor, Living Social, takes 30%. Competitors are just gonna undercut their margin until it's about in the 15-25% range.
tl;dr: Groupon will fail.
The fact that their operating expenses are so high is going to kill them. They are trying to be everywhere at once which may be impossible. Also, their margins are currently 50%. Their main competitor, Living Social, takes 30%. Competitors are just gonna undercut their margin until it's about in the 15-25% range.
tl;dr: Groupon will fail.
They may be "worth" 25 billion, but they only raised 700 million with the IPO.. So instead of 6 billion in cash they have 700 million in cash and 24.3 billion in 'paper'..
They should have taken the cash..
As for opening prices, those are always fake.. No one got to actually buy it, well, no one real, at that price.. First trade was at 28 and that should be what is considered the opening price.. So actually the stock dropped..
Their valuation at $20/share was $12.7 billion. At $28/share they are worth around $18 billion.
But yeah, like Feydakin said, that's all paper assets. Although, some of the people at the top did take one of their rounds of Venture Capital to basically pay themselves last December:
"One purpose of Groupon’s massive new round is to provide liquidity for existing shareholders, including those who may have been ticked off that the company spurned Google. Fortune has learned that all Groupon shareholders recently received a letter offering to buy back up to 15% of current stock holdings, and the SEC filing indicates that $345 million of the $500 million will be used to cash out insiders (both investors and management)."
-http://www.marketingpilgrim.com/2010/12/groupon-500-million-venture-capital.html
But that was nowhere near $6 billion they could have got from Google.
Groupon is going downhill, it's just Andrew Mason and the rest of the team's egos are way too big to admit it.
But yeah, like Feydakin said, that's all paper assets. Although, some of the people at the top did take one of their rounds of Venture Capital to basically pay themselves last December:
"One purpose of Groupon’s massive new round is to provide liquidity for existing shareholders, including those who may have been ticked off that the company spurned Google. Fortune has learned that all Groupon shareholders recently received a letter offering to buy back up to 15% of current stock holdings, and the SEC filing indicates that $345 million of the $500 million will be used to cash out insiders (both investors and management)."
-http://www.marketingpilgrim.com/2010/12/groupon-500-million-venture-capital.html
But that was nowhere near $6 billion they could have got from Google.
Groupon is going downhill, it's just Andrew Mason and the rest of the team's egos are way too big to admit it.
Don't underestimate the usefulness of having billions in stock at their disposal. If the valuation holds, they are probably going to start snapping up competitors and diversifying their business. Both would help insulate them from competitive pressure in their main niche.
Regarding the share valuation, most of the shares were placed with institutional investors (e.g. mutual funds, etc.). Institutional managers are less inclined to dump this early. It can happen, but it's less likely. That means Groupon has a small war chest to work with - not just cash, but the value of the unsold shares.
It's too early to say whether they are going to win or fail. A lot depends on what they do with their war chest.
Regarding the share valuation, most of the shares were placed with institutional investors (e.g. mutual funds, etc.). Institutional managers are less inclined to dump this early. It can happen, but it's less likely. That means Groupon has a small war chest to work with - not just cash, but the value of the unsold shares.
It's too early to say whether they are going to win or fail. A lot depends on what they do with their war chest.
I hate foretelling the future to you mortals but I feel benevolent today so here you go.
Companies that do a daily deal don't tend to do another one. So after Groupon and all the stupid clones are done eating up their food supply they will go hungry. Already you see them branching into garbage like travel deals that don't expire. I mean, is a deal that doesn't expire a deal or is it spam?
Fly to Vegas for $12... and a billion dollars in fees.. come on!
Instead of steak dinners and cheap sushi like the ads promised people are getting crap like laser skin removal, cleaning and garbage products like those bracelets that cure cancer. My friend is a dentist and did a teeth whitening Groupon in order to land new clients. Nobody that did the deal became a client and he lost money. Possibly because he couldn't sell it, but more likely that people who use these Groupons are cheap bitches looking to rape the system. Group buying? Come on. They pitch it like lots of people are getting together to help businesses when in reality it's a giant gang rape.
Already I'm getting emails on Groupon increasing their rates on their offers because it's getting harder for them to find new people.
The reason I said six months above is that there will be some initial hype as all the Groupon groupies buy the stock and tweet it to their friends to look cool. Might be sooner but it's coming. No reason to pay interest on a margin account when it's not going to seriously tank for a little while.
^This.
The people that are buying Groupons are people looking for the cheapest deal. People looking for the cheapest deals tend to be horrible customers for businesses because they have no brand loyalty and will leave whenever a better deal comes along.
These small businesses should be probably focusing on quality customers, not quantity.
Free advertising and new customers coming in the door sounds appealing at first. But once you calculate the ROI, it doesn't look so good.
Once most companies figure out what Groupon is pitching isn't exactly what they are getting, they'll stop using them.
I really hope it's not another bubble, but it's looking like it. I'd like to think we finally found ways to make tons of moniez on the internet.
I hope that there will always be large companies and VCs interested in buying and investing in small Tech Companies, but it's looking like the market may be oversaturated now.
