GRPN is not your regular dotcom IPO. It has strong foundation and established strength of 10,000 employees..
It has a strong business model in the current economic downturn. Apart from discount coupons it has potential to grow its base on other segments once economy picks up and demand/craze for discounted coupon subsides.
I went through these initial reactions for GOOGLE IPO and see the same happenning to groupon.
Just remember that GRPN is not a regular dotcom company that can go bust...It is building a solid foundation already...A little patience is needed..
I disagree. Google was profitable when it went public had had a competitive advantage over Yahoo and other search engines. It also had and continues to have superior searching abilities relative to its competitors. Its competitive advantage is a direct result of its software and easy-to-use interface.
Groupon, on the other hand, needs its own employees to go out and find customers for its Groupon deals and it apparently receives 50% of the revenue from its coupon sales. However, it has viable competitors such as Living Social and other smaller local companies in big cities. If a company only wants to sell maybe 100 coupons, why pay Groupon 50% of the value if a competitor such as Living Social is willing to market the coupons for 30% of the value (or whatever the amount might be)?
Groupon has large costs as a result of its thousands of employees yet it is not profitable and the revenue as a percentage basis of its coupon sales will almost certain decline from 50% over time as it faces increasing competition.
Google did offer to buy Groupon because guess what? Google already has billions of dollars on its balance sheet. Even if the company it acquired was losing money Google has the balance sheet to had back it up if it needed to.
Point? Groupon doesn't even have the balance sheet to keep itself afloat!! See I could see a facebook, Google, Microsoft buy a Groupon or living social because they have the finances to do so. Groupon only has losses going for itself!!
Remember, Google wanted to buy Groupon and Groupon did not let that happen!.
Groupon is all about AOCAL AD DOLLAR MARKET SHARE.
I was not surprised GOOGLE wanted to acquire Groupon. If that had happened, do you know Groupon would now been a part of Google!!
It is fair to compare Google and Groupon - they both are chasing AD DOLLARS with Groupon massively leading the LOCAL AD DOLLAR space
If you're long I would get out while you can. There is no way Groupon will be able to compete. Amazon is backing Living Social and Google Offers is growing by the day. I've posted dang article so many times but it gives a good overview of what Groupon is up against.
Wow! Biggest croc-o-sheit I've heard in awhile. Groupon-poopon- longs. A company riddled with accounting issues straight out the gate, propped up by low float, and is now forcing employees to hand over shares in attempt to control its own fate. No-one needs Groupon, there are dozens of start-ups doing the same thing. I'm sure management is regretting not taking Google's offer now.
Groupon is worse than Opentable and will implode faster than you can say oh sh... Whoops! Too late, already down 30% from its high.
Not a tech company... terrible business model... extremely unsatisfied merchant partners... incredible cash burn... most Over-Hyped IPO in years.
Dead money here.
Maybe they can morph into a finance/credit card company with "Groupon" rewards....
It is not about copying the model and building a website with coupons...there is substantial effort and funds involved in setting up the ecosystem where u can approach the retailers....GRPN just did not hire 10,000 employees to sit there and do nothing...there is a reason for that...they have the setup now to unleash growth....which new entrant can compete with them????
Please explain why groupon cannot go bust. An increase in marketing didn't bring an equal increase in revenue. With 10K employees, groupon has huge costs and is vulnerable to running out of money. You do realize that groupon must bring in money every month to pay these people. What does groupon bring to the table that other deal sites do not? Living Social just got another private investment helping it grow as well. It is becoming a crowded space and people could grow tired of constant email to their inbox, especially with many deal sites, some people could be getting dozens of deals a day and just start canceling their lists.
If GRPN is that bad, why is Living Social which has about 1/3 or less marketshare as that of GRPN, getting funded by private investors including AMZN?
You think all those who are funding a second tiered market player are FOOLS?
At least put it this way .. GRPN is worth at least 5 to 10 times Living Social just like GOOG is worth about 10 times more than second player YHOO!
Based on Living Social valuation - tell me what should be the fair value of GRPN ...!!
It got to be above $20 / share unless you all think those who are investing in Living Social are dumb