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GRPN was a always a short sellers dream come true. Next up, ZNGA.
Yes, it was, and that's why it is nearly impossible to short. I've been paying 30-40% annualised to borrow the stock for shorting and the rate spiked to nearly 60% recently. Being short is more expensive that most people think.
People I know who currently work for Groupon say that the culture there is falling apart. To get the numbers investors expect the sales people need to reach unrealistic sales numbers. Management is grasping at straws, trying every trick in the book to not let the whole thing fall apart. The Groupon model is simply not sustainable, it was a onetime gimmick. As someone who lives in Chicago, I am worried about its failu…
But they're not our sole pillar any more. I think we all know that pillar is going to come crashing down in the near future, and we're ready.
Groupon helped propel us to where we are, and we're standing on our own now. In my opinion, the future of tech in Chicago will not solely depend on Groupon's activity.
1) Merchants perception of the whole daily deal market is very negative. Repeat business is quite low and it mainly attracts the spendthrifts who are looking for a deal. Given the margins that most local businesses have, running a daily deal means taking a hit on those margins.
2) From a consumer perspective, the novelty of the daily deals market has really worn off. Consumer fatigue has set in and more and more people are tired of having their inboxes flooded with emails. Personalization is still a joke and ticks people off even further.
It wont be long before the whole local deal market implodes (think of it -- the 2nd largest player - LivingSocial is not yet profitable). Groupon is well aware of this and so is trying to ramp up its technology platform via acquisitions to eventually evolve into something more. Its just a matter of time that the whole thing comes crashing down.
Earlier quoted context omitted.
It's not a ponzi scheme.
Simply stating it is not a ponzi scheme doesn't advance the conversation in a meaningful way in my opinion. It's really just semantics at this point. There is a lot of evidence here that suggests systematic misleading (if not out-right defrauding) of investors. So you while you are technically correct, I think what Groupon has done is in the spirit of Ponzi even if it is executed differently. What's happened here is…
Perhaps those people should have been reading Hacker News:
http://www.hnsearch.com/search#request/all&q=groupon&...
(The first post is rather long and fairly neutral, but check out some of the posts (and their dates) right after that.)
They should have unloaded this fraud on Google when there was a $6 billion cash offer sitting on the table (assuming that was true). The fact that Google even offered that much leads me to believe that they have jumped the shark with that offer. Anybody who knows anything about retail would have studied the business model and realized that this was not sustainable. Obvious red flags: 1. Heavy reliance on field sales…
I'm not sure if they actually could have sold the company to google even if they wanted to. My understanding is that you must open your books to the prospective buyer after a certain stage and it is likely that once the google accountants had a look at Groupons books the deal would have fallen through. That could have created negative press and damaged their pump-and-dump strategy for the IPO.
Earlier quoted context omitted.
Yes, it was, and that's why it is nearly impossible to short. I've been paying 30-40% annualised to borrow the stock for shorting and the rate spiked to nearly 60% recently. Being short is more expensive that most people think.
Why not just buy puts on it?
GRPN was a always a short sellers dream come true. Next up, ZNGA.
Why do you say Zynga? It was my understanding that their financials are a good bit more stable, even if they are Facebook-dependent.
Rovio was in the business for 5 years before Angry Birds, and I doubt they'll have another hit like Angry Birds ever again.
Id fell apart when it couldn't come up with something better than the Doom franchise.
OMGPOP was very smart to sell out to Zynga, because there is no way it would have come up with something even close to Draw Something in another 5 years.
Unlike rock stars and pop singers, creating a string of gaming hits is so much harder because it requires the perfect storm of so many variables each and every time, whereas a single person like Adele, Amy Winehouse, etc. can rely on their genius alone to create a hit.
Who would have imagined that groupon had a future? It worked on the novelty effect and it was doomed to fail. On the other hand, Chicago business is full of bugs. Ghostery block 13 (!) calls to different websites such as: Quantcast, 24/7 real media, Outbrain etc... I won't visit this website again. I wish I was warned of that before hand not when I go to the website, I value my privacy more than going there.
A little premature to write an obituary of a company that finished 2011 with 1.6B in revenue.