Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Is OpenTable Worth it?

incanto.biz

Post reply on HN
Print view View original

41–50 of 87 posts

Re: Is OpenTable Worth it?

#41

Post by krosaen »

d2viant wrote: post #36
krosaen wrote: post #34

Earlier quoted context omitted.

No barrier to entry? Don't they outfit each customer with a complete table management system including the hardware?

That's not a huge barrier though. The restaurant didn't have some outlay of capital for that hardware that is going to motivate their decision to switch. When they cancel their OpenTable contract, they'll just send the hardware back. This seems like an opportune space for a startup to compete in. You could easily sell the online reservation service for a fraction of what OT is charging and just skip the hardware nons…

I would hope so, but I remember reading that the hardware was one of the keys to their success; "here plug this in, it will do your table management. And by the way, people can make reservations now too." Maybe now a competitor could get by just having a really good ipad app for the restaurants (is this what urban spoon's rez is?)

Re: Is OpenTable Worth it?

#42

Post by d2viant »

gphil wrote: post #38
d2viant wrote: post #19

This is an interesting opportunity to profit from. This company has massive expectations baked into it's stock price (NASDAQ: OPEN), trading at over a hundred times earnings. It's being massively shorted by the hedge funds. Combine the fact that there's relatively no barrier to entry with the rumors that their customer base isn't very satisfied makes for a huge opportunity to profit in the short/medium term.

> It's being massively shorted by the hedge funds. Just out of curiosity, who are "the hedge funds" and how do you know this? Is there some way of researching who is shorting what?

I've been following this company for awhile from a financial perspective, which is how I know. The most prominent hedge fund to short has been Whitney Tilson's T2 Partners', but they're just one among many -- 35% of the floated stock is short now.

I don't know of any way to research who is shorting what other than SEC filings. Mutual/Hedge funds have to report this information on a quarterly basis.

Re: Is OpenTable Worth it?

#43

Post by d2viant »

krosaen wrote: post #41
d2viant wrote: post #36

Earlier quoted context omitted.

That's not a huge barrier though. The restaurant didn't have some outlay of capital for that hardware that is going to motivate their decision to switch. When they cancel their OpenTable contract, they'll just send the hardware back. This seems like an opportune space for a startup to compete in. You could easily sell the online reservation service for a fraction of what OT is charging and just skip the hardware nons…

I would hope so, but I remember reading that the hardware was one of the keys to their success; "here plug this in, it will do your table management. And by the way, people can make reservations now too." Maybe now a competitor could get by just having a really good ipad app for the restaurants (is this what urban spoon's rez is?)

Here's what I'm thinking. I'm already working on a startup, so I'll give this one away for free.

Build the web app portion that allows reservations to be made from the customers perspective, just like they have now. Integrate it with Twilio so that the restaurant receives an automated call and can confirm/deny the reservation on their end, without having to deal with a bunch of new hardware. You just tell them that they're going to receive a phone call with the reservation information and the options. There's little or no training required on their side, no additional hardware, minimal integration, no new systems. It's a more organic transition for a restaurant when you're trying to talk them into becoming a customer.

Re: Is OpenTable Worth it?

#44

Post by aplusbi »

d2viant wrote: post #43
krosaen wrote: post #41

Earlier quoted context omitted.

I would hope so, but I remember reading that the hardware was one of the keys to their success; "here plug this in, it will do your table management. And by the way, people can make reservations now too." Maybe now a competitor could get by just having a really good ipad app for the restaurants (is this what urban spoon's rez is?)

Here's what I'm thinking. I'm already working on a startup, so I'll give this one away for free. Build the web app portion that allows reservations to be made from the customers perspective, just like they have now. Integrate it with Twilio so that the restaurant receives an automated call and can confirm/deny the reservation on their end, without having to deal with a bunch of new hardware. You just tell them that t…

OpenTable is 24/7 and from the customer's perspective, instantaneous. A phone-based backend would not be able to compete.

Re: Is OpenTable Worth it?

#45

Post by herdrick »

d2viant wrote: post #19

This is an interesting opportunity to profit from. This company has massive expectations baked into it's stock price (NASDAQ: OPEN), trading at over a hundred times earnings. It's being massively shorted by the hedge funds. Combine the fact that there's relatively no barrier to entry with the rumors that their customer base isn't very satisfied makes for a huge opportunity to profit in the short/medium term.

> no barrier to entry

There's a pretty big network effect.

Re: Is OpenTable Worth it?

#46

Post by jakarta »

gphil wrote: post #38
d2viant wrote: post #19

This is an interesting opportunity to profit from. This company has massive expectations baked into it's stock price (NASDAQ: OPEN), trading at over a hundred times earnings. It's being massively shorted by the hedge funds. Combine the fact that there's relatively no barrier to entry with the rumors that their customer base isn't very satisfied makes for a huge opportunity to profit in the short/medium term.

> It's being massively shorted by the hedge funds. Just out of curiosity, who are "the hedge funds" and how do you know this? Is there some way of researching who is shorting what?

You can see what the short interest is on a stock to get a gauge of how shorted it is.

Plus if you have access to one of the online idea boards for hedge funds, you can see the write ups from analysts that believe OpenTable is a short -- sometimes they disclose whether or not their fund is short the company as well.

I am counting 4 of those write ups right now.

Re: Is OpenTable Worth it?

#47

Post by chipsy »

d2viant wrote: post #42
gphil wrote: post #38

Earlier quoted context omitted.

> It's being massively shorted by the hedge funds. Just out of curiosity, who are "the hedge funds" and how do you know this? Is there some way of researching who is shorting what?

I've been following this company for awhile from a financial perspective, which is how I know. The most prominent hedge fund to short has been Whitney Tilson's T2 Partners', but they're just one among many -- 35% of the floated stock is short now. I don't know of any way to research who is shorting what other than SEC filings. Mutual/Hedge funds have to report this information on a quarterly basis.

There are a few common signs in institutional shorting, that may be used to determine short interest in absence of official filings, share counts, or other data, but they mostly require a low-volume market to see clearly:

The accumulation/distribution line is strongly inverse to price(It's an indicator based on buy/sell volume. Normally, an accumulation precedes price rise while a distribution is in tandem with a selloff. When shorting, the long-term trend goes the opposite way - there's more buying than selling, yet price consistently drifts down. Caveat: being based on a composite of price/volume/time, it's not totally accurate and even changes dramatically across time scales. )

Market-maker quotes on Level II behave unusually in response to buys or sells(on small, low-volume stocks in particular, MMs are sometimes colluding forces and will "paint the chart" with tiny trades that, in a fair market, would not affect quotes).

Message boards for the ticker symbol suddenly see the appearance of paid bashers who will repeat negative news multiple times a day.

---

With a lot of heavily shorted stocks, the company is fundamentally weak to begin with. However, even a very solid company is vulnerable if it's starting from a low market cap. So - in general - take the appearance of a large short position as a sign to either join them or get out. To see a short squeeze the float has to be very tight, and the stock needs to be forced into a speculative frenzy with good news or just big buyers. The long-run odds always favor companies failing.

OPEN is a big-board stock with a large valuation and volume right now, so I wouldn't expect shorts to be obvious enough that you can see these indicators. As well, their dirtiest tricks are reserved for pennies. They have the lowest risk there, since market cap is so small that they can absorb most price rises.

Re: Is OpenTable Worth it?

#48

Post by sshumaker »

d2viant wrote: post #43
krosaen wrote: post #41

Earlier quoted context omitted.

I would hope so, but I remember reading that the hardware was one of the keys to their success; "here plug this in, it will do your table management. And by the way, people can make reservations now too." Maybe now a competitor could get by just having a really good ipad app for the restaurants (is this what urban spoon's rez is?)

Here's what I'm thinking. I'm already working on a startup, so I'll give this one away for free. Build the web app portion that allows reservations to be made from the customers perspective, just like they have now. Integrate it with Twilio so that the restaurant receives an automated call and can confirm/deny the reservation on their end, without having to deal with a bunch of new hardware. You just tell them that t…

You're missing half of the equation - It's not just the act of performing the reservation, it allows customers to search for to see if which restaurants have availability (and at what time). You can't do that unless you have access to all of their seating data, including walk-ins.

Re: Is OpenTable Worth it?

#49

Post by sp4rki »

ig1 wrote: post #15
sp4rki wrote: post #12

Earlier quoted context omitted.

I have many restauranteur friends in my country, and their profit ranges between 50% to 60%. I have trouble believing that in the USA their profit margins are so crappy. I bet there's a lot of stuff going on under the table (pun intended).

Gross or Net ? - 50% gross profit is common, I doubt you could find any developed country where 50% net profit was the norm for restaurants.

Net. I didn't say this thinking the US should have similar percentages though. This is attributed to the fact that labor costs in my country is easily one third to one half as expensive as labor in the USA. Perhaps there is also less overhead in getting ingredients. I'd understand a 10% ~ 20% percentage net yearly profit, having most restaurants in the lower bracket of course, but 4% or 5% seems extremely low to me.

Re: Is OpenTable Worth it?

#50

Post by ajx »

The question is not is opentable worth it, the question is this question worth it being posted on this site, or is it just completely irrelevent drivel? I'd say the latter is true.
Post reply on HN