Groupon Buys LivingSocial, a Rival Once Valued at $6B
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Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#2> The amount of the purchase isn’t material, and the transaction should close next month, Groupon said Wednesday in a statement. Amazon.com Inc.-backed LivingSocial had cut more than half its workforce in March, part of a downward spiral from the headier days of 2011, when it was valued at $6 billion in a funding round.
For a company of Groupon's size ($3B annual revenue), that doesn't necessarily mean that it was free, right?
Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#3As a former LS employee, I don't know what stings more: the immaterial amount of the transaction, or the 11% after hours plummet.
Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#4> The amount of the purchase isn’t material, and the transaction should close next month, Groupon said Wednesday in a statement. Amazon.com Inc.-backed LivingSocial had cut more than half its workforce in March, part of a downward spiral from the headier days of 2011, when it was valued at $6 billion in a funding round. For a company of Groupon's size ($3B annual revenue), that doesn't necessarily mean that it was fr…
No. I would guess that it means it could be in 10s of million $ range. (Maybe that much but given Groupon losses probably an upper bound.)
Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#5> The amount of the purchase isn’t material, and the transaction should close next month, Groupon said Wednesday in a statement. Amazon.com Inc.-backed LivingSocial had cut more than half its workforce in March, part of a downward spiral from the headier days of 2011, when it was valued at $6 billion in a funding round. For a company of Groupon's size ($3B annual revenue), that doesn't necessarily mean that it was fr…
No, it explicitly means that it won't change the guidance the company has given regarding future performance (it won't get materially more revenue, it won't incur materially more costs). There is a much better explanation of what it means on Wikipedia (https://en.wikipedia.org/wiki/Materiality_(auditing))
Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#6Groupon still exists? I am surprised.
Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#7I worked at Groupon from 2010-2012. I realized that a lot of the problem with the daily deal industry was that a) there was only going to be one winner, because of network effects, and b) no one knew how big the prize would be for being the winner, so it was not clear how much $$ to raise or spend to make it worth it. It doesn't matter how much you spend on a war if you lose.
Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#8Groupon still exists? I am surprised.
The money they raised in their IPO gave them a very long runway. As of a year ago or so they had just over a $1B cash on hand.
Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#9I worked at Groupon from 2010-2012. I realized that a lot of the problem with the daily deal industry was that a) there was only going to be one winner, because of network effects, and b) no one knew how big the prize would be for being the winner, so it was not clear how much $$ to raise or spend to make it worth it. It doesn't matter how much you spend on a war if you lose.
In regards to the first point, who won? Groupon the company got a ton of cash but man they're in rough shape these days. They're not even really in the same business space either.
Re: Groupon Buys LivingSocial, a Rival Once Valued at $6B
#10Groupon still exists? I am surprised.
The money they raised in their IPO gave them a very long runway. As of a year ago or so they had just over a $1B cash on hand.
People forget that companies like Groupon and Zynga are still real businesses. Both are still $1B+ market caps.
As someone who went to both IPO lunches, it was a wild time. Throw Renren, and several other companies from that time period into the mix. 2012 was almost 5 years ago. Unbelievable. Well, at least tech companies actually did go public.