IPO price of $20 and went to $26.11 on the first trading day. So, they are down 54% compared to 11/4/2011. Wow, I hope those guys cashed out by now.
Haven’t done serious work on this name, but I glanced for 20 minutes on the short side – I think it is likely to be a zero ultimately. The cost to borrow the equity is 40% and the buzz is it’s going to 85%. Pretty sure the IPO was basically fraud.
I think Groupon will get acquired before it goes out of business. There is most likely some value in the email lists, vendor contacts, and consumer information that they have compiled so far.
They might get acquired, but by whom? You’ve got finicky customers who try once and don’t return. Hardcore customers will just migrate to another platform if groupon goes under. Google / Amazon / Facebook already have pretty decent user bases anyway. Not saying it won’t get acquired, but if it does, it will be at a low price that is functionally a wipe out from the IPO price anyway. No one is going to pay like, say, $4 billion for an email list (which is almost another 50% down side from here).
Based on what they paid for Instagram, I’m guessing Facebook will probably dish out a $20-30B offer for these guys.
^In an all stock offering after FB values itself at $400B
Only 20-30B? They could probably get away with paying at lest 50B, am I right??? Might have to wait until fb is worth one trillion though – not sure if Groupon can survive that long.
But seriously, facebook already has the best “email” list in the world. How many unique users are on groupon that are not on facebook? Pretty close to none I’m guessing…
Ah memories of the tech sector of 1999 when stocks with zero business model went public and people pounced on them…
Why this company is even relevant is beyond me. There are ZERO barriers to entry in dealing coupons. They own no proprietary technologies. No patents. Small biz doesn’t want to deal with Groupon because they can’t make money.
I don’t even see why anyone would want to acquire them.
Sell or short.
Is it just my impression or did the whole online coupon thing just kind just kinda fizz away? I remember when all these sites were doing this and you got emails every day and everyone was talking about the amazing discount they got at some restaurant or the discounted massage or haircut they got. And now everyone I know has unsubscribed and doesn’t really buy these coupons anymore. Personally, I unsubcribed the day I got a discount offer on a “cupcake decorating course”.
It’s a bubble! hahahaha
Groupon has over 100 million subscribers who vendors can target for specific, user-oriented advertisements. The ability to deliver a daily email advertisement to these many people is very valuable. User attrition is definitely an issue for any online business, but it’s not impossible for Groupon to overcome this if they offer the right deals. The typical 50% discount seems unsustainable since it screws the vendors (this sort of discount tends to attract one-time customers). But in the future, it might be compelling to offer 20% or 10% discounts to stores where the customers are likely to visit repeatedly.
Plus, based on what ads have been clicked in the past, Groupon has gathered a lot of consumer information about those 100 million subscribers. In the right hands, this information can be used to offer more effective future advertisements. Google and Facebook are valuable for the same reason. A large number of subscribers is not intrinsically valuable. However, if you know a lot about those subscribers (like Google does through your searches, or Facebook through your profile and “Like/Dislike” activity), you can target them for effective and lucrative advertising.
In addition, Groupon has gained the mandate to deliver these ads directly to their subscribers’ email. So, they have a delivery mechanism that differentiates them from Google or Facebook.
For these reasons, I believe that Groupon will not inevitably go out of business. However, I’m not super confident that they will do well either, particularly because their management sucks. In the hands of a smarter company (like Google or Amazon), Groupon has much greater potential. The current Groupon guys do not have the brains or experience to exploit this opportunity to its full potential.
I agree with this! The business by itself is worth almost nothing I think; Its not profitable and they have absiolutely no moat! People just want deals and they dont care if its groupon or whatever else so I doubt they ll ever be profitable. Insiders sell shares every opportunity they get, their customer service and policies are worth than competition! And of course I almost forgot they already have accounting issues
But as Ohai said because its a catchy business and easy to incorporate in the businesses ohai mentionned someone will buy them out! But if it was that great of a deal it would already have happened…
It’s probably not a great deal at the current market capitalization of $8 billion. But at some point between $8 billion and $0, it will become a good deal.
I think Angelo Mozilo said that exact same thing about Countrywide.
“Bank of America will reap the benefits of what we have sowed at Countrywide” – best acquisition related quote of all time AHAHAHAHA
Well… Groupon does not really have the same potential for huge mismarked liabilities to blow up their balance sheet.
Nice try but no.
This is how online advertising works. Google thinks they know what you like. Facebook knows what you like. Because Groupon is an email based system the info they collect is substantially limited as compared to the above. If you don’t click, no info. If you delete the email, no info. People really don’t “browse” Groupon like a store.
It’s a sh*t model brah.
Shit just got real.
Dude… don’t respond to Blake… it only encourages him…
This company would mesh best with Facebook IMO.
That being said…I wouldn’t touch the stock with a 10 ft pole. I’m your stereotypical one time groupon purchaser, BTW.