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Groupon’s Strikeouts Reveal an Unspoken Truth

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Re: Groupon’s Strikeouts Reveal an Unspoken Truth

#4

Post by tatsuke95 »

The plot thickens. It's no joke when the main-mainstream of business media is writing about your accounting procedures...

Is Groupon going to become a smash hit or implode? Still infinitely excited about this IPO. It's going to be a great story, whichever way it goes.

Re: Groupon’s Strikeouts Reveal an Unspoken Truth

#5

Post by lambtron »

even though i have my qualms about andrew mason, it seems as if it were the bankers working on the IPO that are doing all they can to get it approved by the SEC so they can earn the fees and to cash out before the public is allowed to invest in groupon. and we are still figuring out if the daily deals model is profitable and sustainable.

Re: Groupon’s Strikeouts Reveal an Unspoken Truth

#6

Post by dodo53 »

I don't really get why it's a big deal. They have to report the normal net loss, and the amount and categories of things they're excluding is public knowledge so why does it matter if they decide to come up with a possibly not-useful metric - isn't it Invetor-Beware on whether to consider that metric or not?

Re: Groupon’s Strikeouts Reveal an Unspoken Truth

#7

Post by adriand »

lambtron wrote: post #5

even though i have my qualms about andrew mason, it seems as if it were the bankers working on the IPO that are doing all they can to get it approved by the SEC so they can earn the fees and to cash out before the public is allowed to invest in groupon. and we are still figuring out if the daily deals model is profitable and sustainable.

> and we are still figuring out if the daily deals model is profitable and sustainable.

Well, we're certainly finding out that the daily deals model is profitable for web developers and assorted startups. Hardly a day goes by without hearing about some new Groupon clone, and the number of web developers who are making money from clients who want to build Groupon clones has to be pretty high. It reminds me of a few years back when all our clients wanted to build their own social network and integrate it with their websites.

Re: Groupon’s Strikeouts Reveal an Unspoken Truth

#8

Post by loganfrederick »

dodo53 wrote: post #6

I don't really get why it's a big deal. They have to report the normal net loss, and the amount and categories of things they're excluding is public knowledge so why does it matter if they decide to come up with a possibly not-useful metric - isn't it Invetor-Beware on whether to consider that metric or not?

1. The SEC, especially after the financial crisis, is not going to tolerate fanciful accounting shenanigans.

2. Even though it is an "investor-beware" system to some extent, typically the SEC doesn't support blatant misrepresentation of the company, which is what these metrics do, even if elsewhere they are reporting more accurate numbers.

3. A company trying to act this shady on their government filings does not instill confidence that they are any less shady elsewhere in their business.

Re: Groupon’s Strikeouts Reveal an Unspoken Truth

#9

Post by jeremymims »

Groupon has more than 100 million subscribers (mostly in America). If we assume that the total available market is another 50 million or so signups in the US, then these loss leader marketing expenses will drop dramatically (no need to offer $10 for a friend that buys a $5 deal).

The attempt of this metric is to explain what their business looks like in another year or so when they've reached some level market saturation. Groupon has treated the deals space as a race (I don't personally agree that it will necessarily pan out this way).

But it's insane not to see that marketing expenses will drop and that they can be comfortably profitable.

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