

Groupon shares tumble to new low after lock-up expires - xtiy
http://venturebeat.com/2012/06/01/groupon-lockup/

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soup10
Groupon is the poster child for everything that's wrong with the silicon
valley startup model.

Founders creating stupid companies with marginally useful products and the VCs
pumping millions into them in hopes of a quick profit.

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pbreit
Disagree. Besides that it's not in silicon valley, it made huge progress in a
notoriously difficult yet humongous service category: local and small business
marketing. It could have remained a tiny player like the 100s of copycats but
instead decided to "go for it" by raising lots of money and expanding rapidly
(the best use of vc and ipo money). People are much to focused on the original
daily deal business (which remains massive and growing) and fail to see that
Groupon is amassing an arsenal of valuable local/smb services. For example, it
now offers both a cybersource and square competitor. And calendaring, loyalty
services, etc.

If the company can continue stringing together solid quarterly results, it
should get back to its ipo price and more.

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jerf
I might agree with you if it weren't for the strong stench of fraud coming off
the whole enterprise. And I don't mean vague "I'm misusing the term Ponzi
scheme" fraud concerns about the entire business model, I mean, accounting
fraud. (And I also mean the term more colloquially than legally. It may be the
case that their numbers are entirely legal, but still carefully spun to
produce results that mislead people.)

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jordo37
I am curious about this especially given their most recent 2012Q1 earnings
which were solid and _I am assuming from what I have read_ seemed to address
the returns loss and other financial issues from previous quarters.

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hasker
The WSJ has an interesting article on Groupon today also. Actually, it is more
of an excerpt from "Groupon's Biggest Deal Ever"
([http://www.amazon.com/Groupons-Biggest-Deal-Ever-
Unbelievabl...](http://www.amazon.com/Groupons-Biggest-Deal-Ever-
Unbelievable/dp/125000084X/ref=sr_1_1?ie=UTF8&qid=1338665575&sr=8-1)). "Behind
Groupon's $6 Billion Brushoff"
([http://online.wsj.com/article/SB1000142405270230364010457744...](http://online.wsj.com/article/SB10001424052702303640104577440580610986086.html?mod=googlenews_wsj))

With their current market cap just above 6bn, it may have actually served
everyone better to take the Google deal. Apparently the board did not approve
the deal because Google would only agree to an $800mm breakup fee, and
antitrust approval would take up to eighteen months. Eighteen months from when
they turned down the offer in December 2010 ends right around now! Still I
have the highest respect for any founders that turn down a 6bn buyout.

~~~
legutierr
You assume it was Groupon who turned down the deal and the public "rejection"
was not just a face-saving maneuver done as a private favor by Google to
Groupon's investors after they themselves had rejected the deal.

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raj_o
Do we know for sure Groupon was offered $6 billion? I doubt Google would be
that stupid to offer that much for a startup. Hell, why not just offer VC
money and own part of the company for far less money. That story sounds like
hype.

Groupon's real problem is their business model is too easily copied. It's also
heavy on the service end, where it relies on a person to person business
experience, something Google is kind of adverse to.

Around here all I see is advertisements for Living Social. I haven't counted
but I am sure there are hundreds of other copy cats out there. It's hard to
guess which company is going to have the best business model in a new business
type, or really if the business model has staying power at all.

Doesn't this business model attract people that want a great deal for almost
nothing? It introduces people to a business they might not know about which is
good. But can't people just visit local businesses if they care to get to know
them? I don't get the business model at all.

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vinayan3
They are turning things around ever so slightly at groupon. They have gone
from negative operating income to positive. Still no income after taxes. I
doubt that Groupon that will really turn a profit.

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InclinedPlane
If it's not trivially easy to make a profit on a company like groupon where
they split revenue 50/50 with the companies they advertise for, there has to
be something deeply wrong.

~~~
legutierr
They may be splitting revenue 50/50 with their customers, but their customers
frequently have to give up most of their profit or even take a loss to be able
to do business with Groupon. In other words, their customers aren't exactly
beating down their door; a significant, and expensive, sales effort is
required.

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bfe
A more or less big dip for a tech company when the lock-up expires was already
an old cliche before the dot-com bust. I'm puzzled why the companies don't do
more to prevent it.

