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Groupon is Effectively Insolvent

m.minyanville.com

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Re: Groupon is Effectively Insolvent

#41

Post by cosgroveb »

jasonlotito wrote: post #21
raganwald wrote: post #15

Earlier quoted context omitted.

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 defa…

Use a browser that lets you resize text? Before you say anything, I already know. I just think this is a problem with the browser, not with a site. The browser should be able to resize the text. If it can't, it's a browser failure.

Shoot. I downvoted you jason, sorry. I looked at the site's CSS and I think the problem we're experiencing is due to this site using -webkit-text-size-adjust: none;

The text does not grow in size at all in Chrome for me (while the other page elements do... the text gets squished which gives it some illusion of growing).

I tested it in Firefox 4 and increasing the font size works fine... So, I know you've been downvoted to oblivion but it is at least partially the browser's fault in this case (vendor-specific css extensions).

Re: Groupon is Effectively Insolvent

#42

Post by dustingetz »

chailatte wrote: post #3

I 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…

quoted from http://shortlogic.tumblr.com/post/5834390772/right-now-our-d...:

"Right now our desk is seeing something they’ve never seen before. It currently costs roughly 100% annualized to short LNKD. So put in monthly terms, if you borrowed $20,000 of LNKD to short, each month you would have to pay an 8.3% borrowing charge (100% / 12 months = 8.3%) or $1667 per month. That is absolutely unreal.

Of course this charge amount can change, and it probably would decline if/when LNKD becomes easier to borrow. But right now is virtually impossible to borrow, so the charge is off the charts."

Re: Groupon is Effectively Insolvent

#43

Post by cosgroveb »

timtadh wrote: post #30
tzs wrote: post #12

Earlier quoted context omitted.

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.

The text resizes in FF4. Do you know what causes the text not to resize in your browser? It seems weird to me that you can force a browser to disallow resizing an element. Edit: Well now I get the Apache Tomcat default page so it may be impossible to answer this question.

Looks like -webkit-text-size-adjust: none; which would explain why it works fine in FF. The text does not re-size for me in Chrome.

Re: Groupon is Effectively Insolvent

#44

Post by ChuckMcM »

wccrawford wrote: post #2

They'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…

Their strategy reminds me most of the telecom strategy in the 90's. Since as many have pointed out there are few barriers to entry, one possible strategy is to get so big so fast that your the 800lb gorilla before anyone realizes the opportunity.

That said, their losses do seem to be coming down relative to their revenue which would imply they have some idea of the 'recipe' that would make money in this space and are spending capital on growth.

But the really egregious thing that stands out, is that if the "early investors" had taken only a third of the billion dollars off the table, rather than the 80% or so they did take, we probably wouldn't be having this discussion. Rather they would have enough money in the bank to fund this growth rate and converge on an operating profit (see point above) at or just before going public.

If this kills them, and startups are full of the 'one decision' that in hindsight took them from the launch rail to the fail rail, they will have no one to blame but their investors.

Re: Groupon is Effectively Insolvent

#45

Post by thisisfmu »

dustingetz wrote: post #42
chailatte wrote: post #3

I 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…

quoted from http://shortlogic.tumblr.com/post/5834390772/right-now-our-d... : "Right now our desk is seeing something they’ve never seen before. It currently costs roughly 100% annualized to short LNKD. So put in monthly terms, if you borrowed $20,000 of LNKD to short, each month you would have to pay an 8.3% borrowing charge (100% / 12 months = 8.3%) or $1667 per month. That is absolutely unreal. Of course this char…

Could this be due to short demand from insiders to protect the IPO value of their stock until the lock-up period expires?

Re: Groupon is Effectively Insolvent

#46

Post by ChuckMcM »

code_duck wrote: post #22

So, after they stop investing in expansion and reach a stable level, what is the realistic value of Groupon? Or does nobody really know enough to speculate?

Well Amazon is a high volume relatively low margin business which is valued at a bit over two times revenue. So if they stablize out at a revenue of $4 - $6B/yr it might make sense to value them at $8 - $12B.

Re: Groupon is Effectively Insolvent

#47

Post by Macsenour »

Don't roll your eyes, but this is exactly what Reagan did to the Russians. Basically, spend more and faster than the other guy until he cries uncle.

Groupon is raising money, spending like crazy to be the top dog. When the other "coupon" companies can't keep up, Groupon will buy them, retaining their #1 position. Once all of the others are gone or reduced to a tiny size, they'll go back to a sustainable model. This explains why they have a focus on hyper growth.

What do you think?

Re: Groupon is Effectively Insolvent

#48

Post by BruceForth »

narrator wrote: post #39
tzs wrote: post #4

To 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…

What is it with everything being described as a Ponzi scheme these days? Groupon, Bitcoin, Subprime MBSs, Social Security, etc.

Maybe because they are?

Re: Groupon is Effectively Insolvent

#49

Post by unreal37 »

kno wrote: post #28
tzs wrote: post #4

To 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…

Can anyone explain how these guys spend money on the business, how can cost of running Groupon be so high?

Advertising. Groupon spends $100 million a month on buying web ads on Facebook and such. They're buying users essentially..
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