In case you missed the link at the bottom - live stock reports. (As at this time it's almost up to $29)
Groupon shares open up 40%
21–30 of 61 posts
Re: Groupon shares open up 40%
#22Earlier quoted context omitted.
One rice university study says that 70% of health spa's , yoga studios and similar businesses see repeat customers. Since it doesn't cost a yoga studio to add a person to a lesson(up to a point), customer cheapness is less an issue and maybe daily deals are a new effective way to better scale certain kind of businesses.
Doesn't it concern you that Groupon works best for services that no one needs ? I would say that in times of austerity, yoga, helicopter rides, health spas, parachuting, etc. are the first to go.
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Re: Groupon shares open up 40%
#23Earlier quoted context omitted.
I guess, but that is how private companies are valued every day. I sell you 5% for $1 million, we are both agreeing that the company is worth $20 million.
But Groupon is now a public company and what they've done isn't exactly normal (though LinkedIn did something similar...and of course yesterday the follow-on was announced): Groupon floated a record-low percentage of its total outstanding shares among U.S. Internet companies, helping to stoke demand. Only 4.7 percent of the stock was made available to the public, based on the offering terms. That’s less than in any U…
It isn't quite common, but many of the internet darlings did this same thing. I don't know why it is news all of a sudden. While GRPN has the smallest float, there were many other companies in the ballpark (P, LNKD, GOOG, etc). A more general rule of thumb for IPO's is 20-25%, but all of these guys had single digit values. It is fairly smart move on their part. They get a higher valuation due to demand and supply, and a long as all of the investors/employees don't flood the market with their shares, the early investors/employees win.
Recall Google: http://en.wikipedia.org/wiki/History_of_Google#Financing_and...
They floated 14m out of 271m total shares, and other stockholders added another 5m or so... so the total amount it IPO'd for was around 7% of the company but GOOG's share was roughly 5%
Re: Groupon shares open up 40%
#24I haven't felt this strongly about shorting a stock long-term in a long time. But I don't know how long the short-term irrational exuberance is going to last - will it wipe out my investment before the stock crashes down? I haven't seen one pro-Groupon (or general daily deals) analyses that says anything different than "it gets people in the door and generates buzz" which I think is nothing more than fuzzy PR talk si…
I've been burned by this before, especially by the margin requirements for a short-sale. It doesn't matter how confident you are a stock will crash, because if it keeps going up, eventually you will either need to sell at a big loss or add more money to keep up. And it's very tempting to short even more as it continues to go up, since you'll make even more when it crashes! And then you run out of money and are screwe…
"Markets can stay irrational longer than you can stay solvent." -- Keynes
Re: Groupon shares open up 40%
#25I'm really inclined right now to buy put options on GRPN.
Re: Groupon shares open up 40%
#26I haven't felt this strongly about shorting a stock long-term in a long time. But I don't know how long the short-term irrational exuberance is going to last - will it wipe out my investment before the stock crashes down? I haven't seen one pro-Groupon (or general daily deals) analyses that says anything different than "it gets people in the door and generates buzz" which I think is nothing more than fuzzy PR talk si…
Short term exhuberence or organised pump and dump? We've seen it before with the tech IPOs.
It has lockup period of 180 days so that the insiders and the major shareholders can't dump the stock immediately..
http://www.sec.gov/Archives/edgar/data/1490281/0001047469110...
Re: Groupon shares open up 40%
#27I'm really inclined right now to buy put options on GRPN.
You can't yet.
Re: Groupon shares open up 40%
#28I'm absolutely unsurprised that the shares were sharply up on the open; IPOs over the past decade have mostly turned into government-sanctioned (or at least ignored) "pump-and-dump" operations. One of the things I've come to despite having moved to Silicon Valley is this absolutely infantile obsession with by-the-minute stock prices. Congrats to Groupon on their successful IPO; I still have very strong doubts that th…
Everything points that the stock will be trading in the teens in the near future. Their financials are a joke. Their costs to acquire users are astronomical (http://adage.com/article/digital/groupon-marketing-spending-...) and their accounting is shady at best.
Re: Groupon shares open up 40%
#29Earlier quoted context omitted.
One rice university study says that 70% of health spa's , yoga studios and similar businesses see repeat customers. Since it doesn't cost a yoga studio to add a person to a lesson(up to a point), customer cheapness is less an issue and maybe daily deals are a new effective way to better scale certain kind of businesses.
Doesn't it concern you that Groupon works best for services that no one needs ? I would say that in times of austerity, yoga, helicopter rides, health spas, parachuting, etc. are the first to go.
First, I agree that this is an insightful observation, and it certainly applies to conventional suppliers. For example, if demand for yoga classes drops, the demand for professional-grade yoga mats will drop.
But a businesses like an advertising agency or coupon distributor is not a conventional supplier: It exists to create demand for things people don’t think they need. In times of austerity, it’s true that “organic” demand drops. But that can increase demand for businesses that create demand out of thin air.
When the class is full, nobody needs to distribute a coupon. But when the class is half-empty... Perhaps Groupon will get the call. Perhaps.
I am not endorsing Groupon, just trying to point out that since they aren’t a yoga business or a conventional supplier to a yoga business but a business that throws a lifeline to a yoga business, their economics may not exactly track yoga business economics.
Re: Groupon shares open up 40%
#30Earlier quoted context omitted.
I've been burned by this before, especially by the margin requirements for a short-sale. It doesn't matter how confident you are a stock will crash, because if it keeps going up, eventually you will either need to sell at a big loss or add more money to keep up. And it's very tempting to short even more as it continues to go up, since you'll make even more when it crashes! And then you run out of money and are screwe…
"Markets can stay irrational longer than you can stay solvent." -- Keynes
I agree with the sentiment, but the quote is misattributed. It was probably first said by Gary Shilling, a writer for Forbes, in 1993: http://quoteinvestigator.com/2011/08/09/remain-solvent/