GRPN down 6%, down 75% from IPO

In case you are interested…

Is it just me, or is it kind of scary how all these social media companies are losing 70% of IPO value within a few months?

Hope you didn’t buy that crap

I’d be more scared if they didn’t.

Maybe I owned funds that might have made small investments in tech - I’m not actually sure. But definitely did not buy any of this directly. However, people around here might still be affected indirectly - like through higher unemployment, California screwing up tax projections, or investors getting a sour taste for equities. I will admit that there is some morbid satisfaction in seeing nonsense companies lose value, but it’s hard to imagine that this is actually good for anyone.

I don’t see any surprise here, didn’t they receive some flak for some shady accounting practices they were trying to pull? I made a small investment in FB since $20 has been my target since their IPO, it will probably go down even further once employee shares flood the market.

Do you think it’s a good buy at $4.50?

May be like buying it now and selling it in few weeks to lock in some profit?

FB is a legitimate business with a legit business model. It was just overpriced.

GRPN is a garbage company with horrible management with zero business model. There are zero barriers to entry in dealing coupons. Itr should go to zero IMO.

Came to say this, surpised to find myself saying that Blake already nailed it. FB has a nice niche and good user data (not to mention solid profitability and growth), but investors can’t pay 50-100x earnings and expect good results. Groupon is floundering, and I think anyone who thought about their business critically for even 10 minutes before buying them would have come to the same conclusion.

What’s weird about this is that even if a person is not capable of basic critical thinking (which seems to apply to a decent swath of market participants), there were any number of articles online around the time of the IPO outlining why this business would fail, and yet, some people still bought into this turd. Sucker born every minute?

I get the feeling that many people who bought Groupon really wanted to buy Facebook, but there were no Facebook shares to buy. So, any other “social media” company was a substitute.

Never considered this, but this idea makes sense to me, actually. Blegh, I get disheartened to think of people who make investment decisions this way. Did anyone read about that guy who put his daughter’s college fund in facebook? I realize he made this terrible choice of his own free will, but jesus, how crappy is that.

@Bromion: Sucker born every minute definitely applies here.

Most retail investors lack business savy and don’t read financial statments (because they don’t know how to). My friends mom bought FB at 38. She did no research on it, she just expected it to go up because it was a IPO. I think most people are like this. Myself I worked in investments in the past and now I am in Sillicon Valley working in tech. I work with a lot of these companies so I see the inside and out. GRPN has to be the worst managed company out here. They could be put out of business IMO at any time because they own nothing. There are zero barriers for anyone to set up a coupon business. I have friends in the restaurant business out here and no one wants to work with them. Every Groupon I get is for a massage, car wash, or a hair coloring or something useless. It’s just a terrible business model.

I receive emails from a few companies with the same business model (groupon included) and to be honest I don’t remember ever getting something from groupon. Their competitors are more in touch with what the market wants.

No argument here, but a lot of the IPO must have gone to institutions too. You would think professional money managers would know better than this (know how to read financial statements, understand business models, etc.). I guess the industry is destined to chase fads. Sadly I could not bet against GRPN because the lowest rebate on borrowing shares for a short that I saw was 40% and at one point I beleieve it was as high as 80%. Hard to make money with such a huge hurdle.

The percentage of FB longs represented by your “friend’s mom” is probably less than 1% for FB. The fact is the majority of owners of this stock and all other large cap stocks are sophisticated institutional investiors

Didn’t Groupon turn down something like $5 billion from Google? Or was it just marketing hype pre-IPO? Hang on…

And now it’s market cap is $3B and I bet the founders haven’t sold their shares yet. So, nobody wins.

My wife loves groupon. That’s the only reason I keep looking at it for potential. But,…she also loved Boston market…

You can love a product to death, but if the company isn’t well managed, it all goes to waste. I remember reading about Groupon’s business model and how they cater to businesses in desperate need of cash on their books. I don’t think this is sustainable.

Point made. It’s just that so many people use the product, kind of like fb. I guess if they dont make money, it really doesn’t matter how many people use the product. Perhaps they can change the model and make it sustainable, I guess that’s why I have interest.