Groupon is Effectively Insolvent • Hacker News Board

Re: Groupon is Effectively Insolvent

#101

Post by po » Sat, Jun 04, 2011, 8:13 AM UTC

cosgroveb wrote: post #41

jasonlotito wrote: post #21

Earlier quoted context omitted.

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 downvot…

This is because the link is to the mobile version of the site. It's supposed to be read on a handheld.

At the bottom there is a link to the "desktop" version of the article but if you click that you will quickly realize the reason the link goes to the mobile version: the desktop version is too noisy.

Re: Groupon is Effectively Insolvent

#102

Post by anonymoushn » Sat, Jun 04, 2011, 9:49 AM UTC

lotu wrote: post #87

brazzy wrote: post #83

Earlier quoted context omitted.

However, while the system may end up paying out less than it promised at some point, it will not collapse completely.

Many people consider their Social Security payments to be promises to them, in exchange for paying the Social Security tax. The difference between Social Security and a Ponize schema is you can stop putting money into a Ponzie scheme if you believe that you won't be getting the money back. If people had the option to stop paying in to Social Security then it would have collapsed a long time ago.

Many people are wrong ;( http://en.wikipedia.org/wiki/Flemming_v._Nestor

Re: Groupon is Effectively Insolvent

#103

Post by chopsueyar » Sat, Jun 04, 2011, 11:48 AM UTC

OstiaAntica wrote: post #97

guelo wrote: post #96

Earlier quoted context omitted.

Calling Social Security a ponzy scheme is just partisan propaganda. Since 1983 workers have been putting in way more than is being paid out in anticipation of the retiring baby boomers. The trust fund is invested in Treasury securities backed by the full faith and credit of United States, some of the safest investment in the world unless Republicans manage to raid the fund to finance more tax cuts for the rich.

The SS surplus was spent by Congress, and replaced with non-marketable IOUs managed by Treasury (not securities!), literally kept in a file cabinet in West Virginia. There are no assets in the "trust fund" and there is no legal requirement for the government to pay anything on its Social Security promises.

Do you have a link for the West Virginia portion of your comment?

Re: Groupon is Effectively Insolvent

#104

Post by chopsueyar » Sat, Jun 04, 2011, 12:05 PM UTC

NY_USA_Hacker wrote: post #93

For possibly the most serious concern about GroupOn, the article came close with its statement: "The Daily Deal I got offered today was for a restaurant 30 miles away: how does that make sense either for the customer or merchant?" but still did not score the points: The statement is a starkly clear illustration of a big, HUGE fact about GroupOn's business: It's heavily just a LOCAL business. So, even if they are in C…

I am in complete agreemnet with you.

All of these giant companies trying to serve individuals at the local level seems a bit complex.

A franchise model for a local operator would be a win-win situation.

The franchisee doesn't have to worry about servers or infrastructure, only sales and marketing.

I feel this web franchise model can be applied to many online "social" business models.

Re: Groupon is Effectively Insolvent

#105

Post by chopsueyar » Sat, Jun 04, 2011, 12:07 PM UTC

ChuckMcM wrote: post #46

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.

What with all of Groupon's intellectual property, infrastructure, and goodwill?

Re: Groupon is Effectively Insolvent

#106

Post by chopsueyar » Sat, Jun 04, 2011, 12:24 PM UTC

Macsenour wrote: post #47

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 e…

I think Groupon won't have enough money to acquire competitors because they have to give half of their revenue back to the merchants AND pay back all these other investors.

The "other" coupon companies probably have profitable business models, not based on market-share, but profitability.

It depends what each company's exit strategy is.

The barriers to entry to this type of business are not that difficult, particularly on a local level (which is where the business activity takes place). Show a deal of the day, take payment, print coupon, have a way for merchant to verify coupon, and have a sales guy getting new deals of the day.

This is probably the type of business that does worse at scale.

Here's the key: Make the deal relevant to the city you are spending a shit-ton of advertising in, not some business 40 miles away.

... Reagan Russia deficit spending comparison. Is this what Bush II and Obama are doing to China, too?

I always thought Reagan single-handedly ended communism, simply by saying, "Tear down this wall!"

Who knew deficit spending was they key to defeating communism?

It must be working in China. We finally have the youth engaged in free-market capitalism, selling their own human organs to purchase iPads.

U S A!

Re: Groupon is Effectively Insolvent

#107

Post by MarkMc » Sat, Jun 04, 2011, 3:42 PM UTC

The balance sheet my not give an accurate picture of the value of a business.

Google was willing to pay $6 billion more than the book value of the business. Google aren't that stupid - I'm guessing that Groupon owns billions of dollars worth of intangible assets which are not listed on their balance sheet. (The biggest such asset is probably their email list).

Re: Groupon is Effectively Insolvent

#108

Post by NY_USA_Hacker » Sat, Jun 04, 2011, 3:57 PM UTC

chopsueyar wrote: post #104

NY_USA_Hacker wrote: post #93

For possibly the most serious concern about GroupOn, the article came close with its statement: "The Daily Deal I got offered today was for a restaurant 30 miles away: how does that make sense either for the customer or merchant?" but still did not score the points: The statement is a starkly clear illustration of a big, HUGE fact about GroupOn's business: It's heavily just a LOCAL business. So, even if they are in C…

I am in complete agreemnet with you. All of these giant companies trying to serve individuals at the local level seems a bit complex. A franchise model for a local operator would be a win-win situation. The franchisee doesn't have to worry about servers or infrastructure, only sales and marketing. I feel this web franchise model can be applied to many online "social" business models.

E.g., romantic matchmaking? When looking for a mate in Podunk, it's not much help for the service also to be in Australia! It would be a rare, very 'long' man who could make good use of that service feature!

Re: Groupon is Effectively Insolvent

#109

Post by code_duck » Sat, Jun 04, 2011, 6:45 PM UTC

philp wrote: post #92

jonprins wrote: post #40

Earlier quoted context omitted.

This happens when you listen to and then improperly handle keyboard events. Somebody probably just copied a script from w3schools and smashed their face into it for a few hours until it did some approximation of what they might have maybe wanted it to do. Unfortunately, the buckshot approach to software development leaves a lot to be desired. Especially when you start with such a horrible original product as w3school…

Are there any decent alternatives to w3schools? I have to introduce somebody to very basic web-development and would hate to have to point them to a resource as bad as w3schools. Edit: I just found this excellent SO link on the topic: http://stackoverflow.com/questions/4662304/online-html-css-j...

When I was entirely starting out, I found the tutorials at tizag.com to be helpful.

Re: Groupon is Effectively Insolvent

#110

Post by allantyoung » Sun, Jun 05, 2011, 7:19 AM UTC

senorprogrammer wrote: post #25

jeffdavis wrote: post #17

Earlier quoted context omitted.

"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?

I think it's generally accepted that yes, they knew where their investment was going. It would have been incumbent on an IPO, in which scenario they then hand off their stake in the company to the public with the expectation of making first-day LinkedIn profits. If Groupon does go through with its IPO, expect those new investors to dump hard on day 1.

Inside investors (those who invested pre-IPO) cannot "dump hard on day 1." In all IPO cases, insiders have a lockup period, generally between 60-90 days before they can sell any stock whatsoever. The only stock being "dumped" is the block of stock being sold in the IPO.