Groupon IPO - Priced at $20 a share...going public today.

[Doppel]

http://money.cnn.com/quote/quote.html?symb=LNKD

Linked-In is still doing okay months later...

Not touching Groupon with a 50' pole.

Linked in is a great buy! Nothing said upside potential on a stock like a 484 P/E.

Groupon went up 40% at open and has basically stuck there other than a temporarily blip past 30.

 

[DrPizza]

Wow, when groupon was at its peak, I said that it was going to be a short-lived fad, because retailers were going to realize that deep discounted coupons like that aren't going to really gain them any business in the long run; certainly not enough new business to make up for the loss of profits on the loss leaders to get people in the door. I was pooh-poohed back then.

 

[Doppel]

After-hours saw it at $26-something. I guess some people cashed out and I imagine a lot of the rest of the people holding it are a little concerned.

 

[SunnyD]

Wow, when groupon was at its peak, I said that it was going to be a short-lived fad, because retailers were going to realize that deep discounted coupons like that aren't going to really gain them any business in the long run; certainly not enough new business to make up for the loss of profits on the loss leaders to get people in the door. I was pooh-poohed back then.

Yeah, Barnes & Noble got (pardon the vernacular) fucking raped on their groupon deal last year. So many people buying Nook Colors and other high-value items (nooks, DVD collections, etc) essentially at 50&#37; off. I <3 my $130 Nook Color.

Yeah they are so idiotic. Now their company is valued at 3x what google offered them. riiiight

With a business model that essentially is driven by large retail corporations "donating" to them, I give it two financial public quarters before their stock price is in the single digits. It won't be long before their shareholders realize how unsustainable their business model is.

 

[Doppel]

Yeah, Barnes & Noble got (pardon the vernacular) fucking raped on their groupon deal last year. So many people buying Nook Colors and other high-value items (nooks, DVD collections, etc) essentially at 50% off. I <3 my $130 Nook Color.

What happened? Groupon B&N brings up $10 for $20 and what not, surely they weren't stupid enough to have a 50% off coupon on one item or something like that?

 

[SunnyD]

What happened? Groupon B&N brings up $10 for $20 and what not, surely they weren't stupid enough to have a 50% off coupon on one item or something like that?

Technically there was a limit of one groupon per person, however the system let you order multiples each from multiple cities. Basically you "buy" a few from several cities tallying the total amount you were looking for.

The other caveat was that you also were "technically" not allowed to stack multiple groupons on an order. Early on, this wasn't a problem and B&N's online system processed orders with dozens of these codes (they were essentially B&N "e-Gift certificates"). Not long after B&N started getting hammered with these orders, they started limiting the online system to 3 of these per transaction, and also halting some of the big ticket orders pending fraud reviews - many of which ended up shipping anyway. There were some people who were spending thousands of dollars worth of groupons picking up multiple Nook Colors, video game systems, or other high value items.

Finally, many of the local stores had no problems accepting the groupons as well. I personally bought a Nook Color using 13 of these groupons in a store.

Needless to say, the coupons that groupon gives out are completely subsidized by the company that's offering them. There was an estimate that B&N ended up losing several million dollars because of the deal.

So basically that leaves us with Groupon's business model - I'm sure they get a cut of some "advertising" fee - but for the most part they're banking on big business using their service. After a couple of escapades like the B&N fiasco (and it wasn't the ONLY one either), it's why we're seeing really crappy regional groupon deals these days instead of good ones.

 

[Wreckem]

Technically there was a limit of one groupon per person, however the system let you order multiples each from multiple cities. Basically you "buy" a few from several cities tallying the total amount you were looking for.

The other caveat was that you also were "technically" not allowed to stack multiple groupons on an order. Early on, this wasn't a problem and B&N's online system processed orders with dozens of these codes (they were essentially B&N "e-Gift certificates"). Not long after B&N started getting hammered with these orders, they started limiting the online system to 3 of these per transaction, and also halting some of the big ticket orders pending fraud reviews - many of which ended up shipping anyway. There were some people who were spending thousands of dollars worth of groupons picking up multiple Nook Colors, video game systems, or other high value items.

Finally, many of the local stores had no problems accepting the groupons as well. I personally bought a Nook Color using 13 of these groupons in a store.

Needless to say, the coupons that groupon gives out are completely subsidized by the company that's offering them. There was an estimate that B&N ended up losing several million dollars because of the deal.

So basically that leaves us with Groupon's business model - I'm sure they get a cut of some "advertising" fee - but for the most part they're banking on big business using their service. After a couple of escapades like the B&N fiasco (and it wasn't the ONLY one either), it's why we're seeing really crappy regional groupon deals these days instead of good ones.

Groupons usual cut is anywhere from 25%-50%(its 50% on most daily deals).

On top of that, the merchants typically don't get their money from Groupon until several months later.

 

[jhu]

Linked in is a great buy! Nothing said upside potential on a stock like a 484 P/E.

Groupon went up 40% at open and has basically stuck there other than a temporarily blip past 30.

You really won't know for sure if they're a good buy until at least next year. One day of trading means nothing.

 

[Doppel]

You really won't know for sure if they're a good buy until at least next year. One day of trading means nothing.

I think they are a bad buy because the business is kind of ridiculous and not worthy of the press it gets.

I know some business owners hated their groupon experience, but as a whole has groupon said how many like it? How many wanted to run a second batch?

EDIT: Found some

http://mikeandrewconsulting.com/201...source=feed&utm_medium=feed&utm_campaign=feed

http://blogs.wsj.com/digits/2010/09/30/rice-university-study-groupon-renewal-rate-not-so-hot/

This is hugely disconcerting as an investment. Investing in a business that isn't making money and which about half of its customers said they'd not even use again?

 

[jman19]

This business is going to fail.

 

[Doppel]

This killer stock is now down to $24.31 in pre-market trading today.

 

[Farang]

I'm not sure I buy the 'easily replaceable business model' argument. Most sales/marketing organizations have easily replaceable business models--that doesn't mean there aren't a ton of successful ones out there. i.e. real estate brokers. Groupon is basically a broker for bargains, they have great name recognition and can attract customers and that isn't something that will be easy to stomp out by competitors.

 

[Josh]

Seems to be a lot of negative press still and do not buy warnings coming in:

http://www.fool.com/investing/general/2011/11/07/5-reasons-im-not-buying-groupon.aspx

 

[manly]

I'm not sure I buy the 'easily replaceable business model' argument. Most sales/marketing organizations have easily replaceable business models--that doesn't mean there aren't a ton of successful ones out there. i.e. real estate brokers. Groupon is basically a broker for bargains, they have great name recognition and can attract customers and that isn't something that will be easy to stomp out by competitors.

For a while, there were literally dozens of copycats. The funny thing is many have simply given up because apparently there's little operating profit left over. I can't say if this validates your argument and bodes well for Groupon.

A significant problem is Groupon attracts a lot of cheapskates, that's why small businesses tend not to be happy afterward. They grew much too quickly and the principals sucked out a lot of VC money, but the business model itself isn't half bad. I believe they get half the gross revenue of each coupon, which theoretically should be quite lucrative if they ran a tight ship.

 

[Imp]

For a while, there were literally dozens of copycats. The funny thing is many have simply given up because apparently there's little operating profit left over. I can't say if this validates your argument and bodes well for Groupon.

A significant problem is Groupon attracts a lot of cheapskates, that's why small businesses tend not to be happy afterward. They grew much too quickly and the principals sucked out a lot of VC money, but the business model itself isn't half bad. I believe they get half the gross revenue of each coupon, which theoretically should be quite lucrative if they ran a tight ship.

That's what I've read. Businesses practically give away stuff hoping for repeat customers, but the cheapos never come back after using up the coupon.

I'd rather buy LinkedIn than Groupon. At least I see some use out of LinkedIn with advertising and subscriptions. Not sure how much though considering 90% of peoples' "Connections" appear to be using free accounts.

 

[jhu]

Groupon falling. I hear Living Social is better.

 

[Doppel]

lolololololol their stock

It's like the dotcom bubble for those who missed it the first time.

 

[Corporate Thug]

I don't know anyone who keep this stock beyond interday trading on the day of the IPO.

 

[ScottFern]

I keep hearing more and more rumblings about how Groupon is a disaster for small businesses and has ruined a few. I don't see how this business is sustained for the long haul. It was fun for a while, but I think the ride is over.

 

[DrPizza]

I'm amazed that it went as high as it did, for as long as it did.

 

[Svnla]

I have a $10 Groupon purchase that will expire next month. I think I better use it soon before it becomes worthless.

 

[aceO07]

Everybody is trying to get a cut of the daily deals pie. Lots of competition now. Sites are popping up to offer daily deals and existing sites are integrating daily deals.

Things don't look good for Groupon.

 

[Hugo Drax]

My 12 month price target for GRPN is 1.00 USD

Here is a screenshot I took of the Epic groupon fail.

 

[Doppel]

this company gone bankrupt yet?

 

[manimal]

http://www.bloomberg.com/news/2012-01-04/groupon-s-drop-reflects-daily-deal-risks.html


I bet they lower their % as the economy improves. You basically have to give crap away.