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  • techstrategy techstrategy Nov 8, 2012 8:04 PM Flag

    Hey TECH!!!!


    Yes I do. Good to see you here. Unlike CMG, which had great unit economics but was vastly overvalued, AMZN has no such advantage. Ironically, GRPN is much better positioned strategically and financially than Amazon. Nonetheless, I expect it to get punished along with everything else, which is why I only bought 5K shares. As I said, I will double up at $2.50 and again at $2 (although I probably will double up before $2.50).

    I would bite off 20-25% of your target position here and scale in... I am serious when I say that GRPN is strategically and financially better positioned than Amazon... Its capital intensity is modest and the sales cycle is heaviest/hardest when establishing new vendors/offers, so it will gain leverage over time (and GRPN can always have a RIF in a crisis where AMZN is locking in structurally higher costs with its buildout of unnecessary and redundant physical distribution centers).

    This is just another case of a massively broken market. Growth funds will own/buy Amazon which anyone on the street can tell you is a massive bubble, but will dump GRPN even though its growth potential (from these valuations) is massive compared to Amazon. Use it to your advantage. Play on a different timescale. This is another great paired trade...

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