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Groupon is Effectively Insolvent
11–20 of 113 posts
Re: Groupon is Effectively Insolvent
#12To save people having to fight with that sites asshole design, here's the text: I'll start by tipping my hat to Andrew Mason. He caught social mood just right, creating a coupon/local/flashmob hybrid business model at the perfect time, and has created the fastest-growing company on a revenue basis in American history. That being said, it's operating like a Ponzi scheme that needs constant infusions of cash to stay af…
When I click the link all I get is "Error establishing database connection", so thanks for copy/pasting.
In case anyone is curious, the design aspect of the site that pissed me off is that it blocks resizing the text. I found it too small to comfortably read, and hitting my browser's "make bigger" button just makes all the other elements on the page bigger, not the text.
Re: Groupon is Effectively Insolvent
#13[deleted]
That may be their theory, but can you offer concrete evidence that the network effects in this line of business look like Metcalfe's Law rather than the more typical O(n log(n)) network effect that is normally seen?
Re: Groupon is Effectively Insolvent
#14I doubt Groupon will bankrupt any of hacker news readers' portfolio; I bet most of them are licking their chops to short this thing (just like they are shorting LinkedIn). Effectively, all these IPO/overvaluation bubbles are meant to steal from (mostly public) pensions of older investors. So the next time you see your uncle or grandpa, buy them a nice bottle of wine! They're paying for your startup (while losing thei…
Although I'm not investing directly, my concern is what the fund manager in charge of my 401k thinks of this.
Re: Groupon is Effectively Insolvent
#15Earlier quoted context omitted.
When I click the link all I get is "Error establishing database connection", so thanks for copy/pasting.
In case anyone is curious, the design aspect of the site that pissed me off is that it blocks resizing the text. I found it too small to comfortably read, and hitting my browser's "make bigger" button just makes all the other elements on the page bigger, not the text.
it blocks resizing the text
Bad, very bad. Don't do this, ever. You don't know what my monitor's resolution is. You don't know if I have left my glasses in the car and need to make the text huge to read what you have to say. You don't know if I have my glasses but I'm reading your words on my television across the room. You don't know if I'm using a tablet or phone and I need to pinch and zoom to navigate.
Set a default design and let me decide what to do with the page and its elements. Thank you.
Re: Groupon is Effectively Insolvent
#16They're trading that temporary debt for hypergrowth, as the article says. "For the remainder of the year they had $669 million in revenue (simply staggering), but had a net loss attributable to Groupon of $398 million. This year, Q1 results showed revenue growth continuing to soar, with revenues of $644 million, but a net loss attributable to Groupon of $102 million." So the time periods were different, but the reven…
Personally I find the booking of the face value of their coupons kind of questionable or at least unsustainable. Yes it is revenue, but a typical "coupon" business would probably only count the fees received from merchants as top-line revenue (because the merchants would collect the money directly). So it makes the business look more viable than it really is. I can't see merchants continuing to accept that, and I bet larger deals (i.e. with Expedia) don't work that way.
Re: Groupon is Effectively Insolvent
#17They're trading that temporary debt for hypergrowth, as the article says. "For the remainder of the year they had $669 million in revenue (simply staggering), but had a net loss attributable to Groupon of $398 million. This year, Q1 results showed revenue growth continuing to soar, with revenues of $644 million, but a net loss attributable to Groupon of $102 million." So the time periods were different, but the reven…
"Ponzi relied on lying to the investors and telling them the money came from good investments."
It seems like a more crucial aspect of a Ponzi scheme is that you tell new investors that their money will go into the business, when in reality it's just paying old investors.
So, did the investors who put in a billion dollars realize that most of it was going to old investors?
Re: Groupon is Effectively Insolvent
#18They're trading that temporary debt for hypergrowth, as the article says. "For the remainder of the year they had $669 million in revenue (simply staggering), but had a net loss attributable to Groupon of $398 million. This year, Q1 results showed revenue growth continuing to soar, with revenues of $644 million, but a net loss attributable to Groupon of $102 million." So the time periods were different, but the reven…
I'm glad you said this. I gave up on a reply yesterday to the initial story for lack of time, but basically it said "anyone that thinks that Groupon is like a Ponzi scheme doesn't understand how a Ponzi scheme works".
You can say all you want about their lack of differentiation from competitors, there huge debt levels, their dicey use of the series G funding, and what appears to be a poorly scaling business model.
You can intend to short them, sell puts.... whatever. But stop calling them a Ponzi scheme. It's an insult to them, it's hyperbolic, and it's ignorant.
Re: Groupon is Effectively Insolvent
#19[deleted]
Re: Groupon is Effectively Insolvent
#20Earlier quoted context omitted.
When I click the link all I get is "Error establishing database connection", so thanks for copy/pasting.
In case anyone is curious, the design aspect of the site that pissed me off is that it blocks resizing the text. I found it too small to comfortably read, and hitting my browser's "make bigger" button just makes all the other elements on the page bigger, not the text.
That's similar to other problems I have with sites recently: their super-special javascript on textareas screws up my own resizing of them, and even worse, ruins ctrl/cmd Z! I don't know how they do it, but screwing up Undo is pretty serious.