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Groupon updates IPO filing, admits it's unprofitable

money.cnn.com

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Re: Groupon updates IPO filing, admits it's unprofitable

#51

Post by mseebach »

samstave wrote: post #45
cletus wrote: post #37

Groupon is a fundamentally bad business and I wouldn't touch it with a 10 foot cattle prod. Some say that we know they're not profitable but that's really not the point. By counting customer acquisition as an extraordinary expense they are implying that: 1. The value of that customer is AT LEAST as much the cost of acquisition; and 2. That cost also accounts for the natural loss of customers. This is shady because (I…

There are many of us who have always known groupon was a bad idea. My information comes from all my friends in SF who own businesses that Groupon attempted to solicit. My friends cupcake shop in union square was asked to sell their cupcakes for 25% of retail and at a loss in a very pushy way by groupon. I have been on groupon for pretty much since they launched. I have bought in total (1) groupon. And I forgot about…

> There are many of us who have always known groupon was a bad idea.

Weasel words.

> My friends cupcake shop in union square was asked to sell their cupcakes for 25% of retail and at a loss in a very pushy way by groupon.

While pushy sales people are annoying, they are hardly unique to GroupOn. I'm sure your friend turned them down. No harm done.

> I have bought in total (1) groupon. And I forgot about it and it expired. (...) things I would never frequently buy anyway (...) I haven't logged into it for nearly a year.

Good for you. But you communicate your argument that GroupOn is a bad idea in an incredibly weak fashion.

Re: Groupon updates IPO filing, admits it's unprofitable

#52

Post by hello_moto »

uptown wrote: post #25
lucasjake wrote: post #12

Earlier quoted context omitted.

This is pretty simplistic thinking. For all you know Groupon wanted the deal badly, Google walked away from the deal, and both parties agreed to go with the story that Groupon walked away so that it wouldn't kill their prospects of an IPO.

Why would Google go along with a story that made it look like they were powerless to get what they wanted?

Maybe because Google can play the angle of "We almost got cheated, now we learn to become better" later on when Groupon crumbles...

Re: Groupon updates IPO filing, admits it's unprofitable

#53

Post by samstave »

mseebach wrote: post #51
samstave wrote: post #45

Earlier quoted context omitted.

There are many of us who have always known groupon was a bad idea. My information comes from all my friends in SF who own businesses that Groupon attempted to solicit. My friends cupcake shop in union square was asked to sell their cupcakes for 25% of retail and at a loss in a very pushy way by groupon. I have been on groupon for pretty much since they launched. I have bought in total (1) groupon. And I forgot about…

> There are many of us who have always known groupon was a bad idea. Weasel words. > My friends cupcake shop in union square was asked to sell their cupcakes for 25% of retail and at a loss in a very pushy way by groupon. While pushy sales people are annoying, they are hardly unique to GroupOn. I'm sure your friend turned them down. No harm done. > I have bought in total (1) groupon. And I forgot about it and it expi…

Its called a personal anecdote. There is plenty of mounting empirical evidence of how bad groupon is, thus I dont feel I need to make a strong case on my personal opinion.

While I appreciate articles and analysis of their filings, revenue etc... I did not require it to make a gut feel for what was really going on.

Groupon has done an amazing job at what they do - even though history will tell how far they really go, I am free to express my opinion in whatever form that may take, however, and I have never felt they were seriously viable in the same way other tech giants of this era are. They are simply a coupon site which, based on direct information from business owners I know, requires said businesses to sell at a loss in the name of brand recognition/volume that groupon claims to bring - but has thus far fallen short of delivering the marketed value of their service.

Re: Groupon updates IPO filing, admits it's unprofitable

#54

Post by lucasjake »

uptown wrote: post #25
lucasjake wrote: post #12

Earlier quoted context omitted.

This is pretty simplistic thinking. For all you know Groupon wanted the deal badly, Google walked away from the deal, and both parties agreed to go with the story that Groupon walked away so that it wouldn't kill their prospects of an IPO.

Why would Google go along with a story that made it look like they were powerless to get what they wanted?

I don't think anyone had that feeling when the deal fell through. Many people were surprised Google was interested in the first place. Google had to consider the deal, after all Groupon was buying shit tons of advertising on Google at the time.

If you're company realizes a certain scale on the internet (i.e. a billion dollar valuation) there is a good chance the deal is going to get looked at by all the big consumer tech firms.

Groupon walked in to the negotiations with a publicly speculated valuation of 1B, and after the deal fell through they were being talked about somewhere greater than 5B, and got an extra investment from DST. Seems like negotiating with Google worked out well for them in that respect.

Notice how Andrew Mason never answers the question publicly about why they 'walked away' from Google.

Re: Groupon updates IPO filing, admits it's unprofitable

#55

Post by uptown »

hello_moto wrote: post #52
uptown wrote: post #25

Earlier quoted context omitted.

Why would Google go along with a story that made it look like they were powerless to get what they wanted?

Maybe because Google can play the angle of "We almost got cheated, now we learn to become better" later on when Groupon crumbles...

That seems like a really complicated narrative for the two parties to fabricate. Isn't it just more likely that Groupon thought they were worth more than Google was willing to pay?

Re: Groupon updates IPO filing, admits it's unprofitable

#56

Post by ianferrel »

suking wrote: post #47
samstave wrote: post #45

Earlier quoted context omitted.

There are many of us who have always known groupon was a bad idea. My information comes from all my friends in SF who own businesses that Groupon attempted to solicit. My friends cupcake shop in union square was asked to sell their cupcakes for 25% of retail and at a loss in a very pushy way by groupon. I have been on groupon for pretty much since they launched. I have bought in total (1) groupon. And I forgot about…

You might want to look into any class actions against groupon for expiring. California has very favorable gift card laws and I think the court would agree this is a gift card.

I believe Groupon's policy is that purchases don't ever expire, just the deal does.

If you pay $x for some deal, and expires, you still have a credit of $x with that business.

Re: Groupon updates IPO filing, admits it's unprofitable

#57

Post by VladRussian »

jcampbell1 wrote: post #35
suking wrote: post #33

Earlier quoted context omitted.

Revenue per subscriber has absolutely tanked. AKA - people become stale and aren't buying so those marketing costs they were trying to hide as one time subscriber costs are going to be around forever.

I think that would be revenue per customer, which has been pretty steady at around $40/customer/qtr, for the past year. The reason revenue per subscriber has dropped is because the ratio of subscribers to customers has fallen. That is a different problem that they are now signing up people who aren't really interested in buying a coupon.

as revenue has come from "customers" and not "subscribers", it sounds especially stupid to report falling "per subscriber" revenue vs. steady and larger "per customer" (why not, for example, report "revenue per cubic foot of hot air produced by the CEO" ?)

Re: Groupon updates IPO filing, admits it's unprofitable

#58

Post by teej »

staunch wrote: post #30
jonknee wrote: post #26

Earlier quoted context omitted.

Who's to say the IPO will be successful? The suits will have to keep their shares for a bit, plenty of time for the whole mess to unfold. Plus, Groupon raised a ton of VC ($950M) after turning down Google's offer. Factoring in dilution, it won't take a drastically bad IPO to make $6B in-hand look like a steal.

Hundreds of millions of dollars already went to the founders. The only risk is whether they'll be super rich or ultra super rich.

Incorrect. Tens of millions of dollars already went to founders. Only investors cashed out in the 9 figure range. [1]

That's a huge difference, especially considering that Groupon fancies itself a $30B company.

[1] - http://www.businessinsider.com/the-millions-of-dollars-group...

Re: Groupon updates IPO filing, admits it's unprofitable

#59

Post by staunch »

teej wrote: post #58
staunch wrote: post #30

Earlier quoted context omitted.

Hundreds of millions of dollars already went to the founders. The only risk is whether they'll be super rich or ultra super rich.

Incorrect. Tens of millions of dollars already went to founders. Only investors cashed out in the 9 figure range. [1] That's a huge difference, especially considering that Groupon fancies itself a $30B company. [1] - http://www.businessinsider.com/the-millions-of-dollars-group...

Nope. Groupon was started by Andrew Mason and Eric Lefkofsky (who also put up the first money). Eric Lefkofsky through his investment shells^Wcompanies took more money out than anyone else.

Re: Groupon updates IPO filing, admits it's unprofitable

#60

Post by jonknee »

staunch wrote: post #41
jonknee wrote: post #36

Earlier quoted context omitted.

There are more stakeholders in the company than the founders.

Sure, but the founders (and the rest of the board) made the decision not to sell. You can call them fools, but they're laughing all the way to the bank.

Possibly laughing all the way to the bank, it could end up that Google was a much better deal.
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