The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
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Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#2it's increasingly clear that groupon is essentially a ponzi scheme with some graphic design. can't wait for the post mortem documentary a la "the smartest guys in the room".
Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#3I remember this happening 5 years ago, but instead of a bunch of salesmen frantically searching for businesses to pitch couponing to, it was mortgage brokers pitching exotic loans to home buyers.
I'll go out on a limb and guess that most of Groupon's sales team consists of ex-mortgage brokers and washed-up real estate agents.
Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#4I wrote a little about this:
Another way to respond to this critique: Groupon could have theoretically solved this problem by adopting faster payment plans for merchants. That would make theirs a worse business with lower cash flow, but it would help their PR (and perhaps their valuation). It’s counterintuitive that Groupon could make their business worse but make their valuation better—it depends on whether their share price is, at the margin, determined by the skeptics or the believers.
( http://www.digital-dd.com/hp-immaterial-usability-users/ )
Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#5I hope they can do an IPO, and short it, along with Demand Media. You gotta invest in what you know.
Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#6I wrote a little about this: Another way to respond to this critique: Groupon could have theoretically solved this problem by adopting faster payment plans for merchants. That would make theirs a worse business with lower cash flow, but it would help their PR (and perhaps their valuation). It’s counterintuitive that Groupon could make their business worse but make their valuation better—it depends on whether their sh…
I don't understand, from Blodget:
". "As of June 30, Groupon had $680 million in current liabilities -- bills the company has to pay,".... "Meanwhile, Groupon only had $376 million of current assets with which to pay them." "
If they pay their merchants faster, where would they get the money?
I just checked at Wikipedia, and,
"A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the organization, but from their own money or money paid by subsequent investors. "
It kind of sounds like existing merchants "Daily Deals" are being paid by new merchants. Because this isn't really an "investment" per se, I guess it's not illegal - but right about now I'd be a little cautious if I were a small business engaging with group on - at least determine what level of protection I have.
Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#7This article is kind of a yawner. No new information and not exactly the magazine I would go to for this topic. I don't really understand the final paragraph which suggests a $6b exit might have been favorable to a $10-25b exit.
Groupon-hate is tired. More interesting is a bull case: http://news.ycombinator.org/item?id=2904187
Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#8In a federal prison somewhere, Andy Fastow mutters "...amateurs".
Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#9I just don't see how Groupon, as it currently operates, is going to make money. And I wonder how well its IPO is going to go, now that they have had to admit that they are losing money.
Re: The Fall of Groupon: Is the Daily-Deals Site Running Out of Cash?
#10In a federal prison somewhere, Andy Fastow mutters "...amateurs".
Groupon actually reminds me more of Value America: