Even considering the vastly different business models these two companies I cant imagine why under any scenario should Groupons equity be worth more than RIM. According to the current prices Groupons equity is worth something like $13b while RIM’s is worth a below $8b. Am I missing something here?
Groupon is a company that hasnt earned a single cent for its shareholders while increasing their ‘Sales’ figures by a phenomenal amount. These sales seem like a total sham, most of which goes back to the businesses that offer the deals. I dont know how Groupon plans to make a margin when the businesses that offer the deals are probably just breaking even on those offers. The market obviously assumes this company is going to be wildly profitable in the future but I can’t see a basis on which to justify this assumption.
On the other hand we have RIM. According to data from google finance the company is selling at 3X TTM earnings and returned about 40% on equity last year. I agree that RIM is now lagging its competitors in the smartphone and tablet market but I still see Blackberries as being the preferred instrument for work based communication - a market I think it will hang on to in the future.
If someone can provide a sound logical argument for why this discrepancy exists, I would love to hear it.