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Thinking of Investing in Groupon?

by ZachWaldman
20 replies
Most Warriors already know what a mess Groupon is. If you have any doubt, here's just a portion of an article I found:

"The long answer is, Really, seriously, please do not buy this stock, no matter what your friend tells you, because Groupon might look like a lovely place from the outside, with its kooky, clever email offers and its attractive website, but behind the scenes this company is a mess, and the stock carries loads of hidden risks.

"

Read the rest here:

Groupon's No Bargain - Yahoo! News

Why even bother going public when everybody seems to know it's the worst investment on Earth?
#groupon #investing #thinking
  • Profile picture of the author StevenSaliba
    I have a love/hate relationship with the stock market. I have a friend that lost $80,000 in the stock market overnight. It's a crazy game. But if you really know what you are doing, you can make A LOT of money with stocks. I guess it takes years of experience to really be able to predict trends and prices of stocks...
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  • Profile picture of the author AT-Copy
    Interesting article on this on the BBC too:

    BBC News - Have daily deal sites had their day?

    How can a business by valued at 10 billion without making a profit...crazy....
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  • Profile picture of the author sbucciarel
    Banned
    lol ... not on your life would I invest in Groupon. It's a train wreck waiting to happen.
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    • Profile picture of the author fluffythewondercat
      It's a slow motion train wreck.

      I'll bet institutional investors are loading up on Groupon, though. Thankfully a small portion of our portfolio is in stock funds.

      What's interesting is that no one on the inside cares if Groupon survives, only that top management gets their big payday. Plus this is the only chance the initial investors have to get their money back. Sound like a company you want to invest in?

      fLufF
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  • Profile picture of the author Burton Lancaster
    I'll scoop up some of the scattered pieces post trainwreck
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  • Profile picture of the author pacelattin
    Groupon is a ponzi scheme in my opinion, been thinking about this all day. For them to work they keep on having to get more money than they pay out...

    ClickZ has a great article, if I might say myself, from a really smart guy.

    Group-Buying Sites Will Fade Out | ClickZ
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    • Profile picture of the author MattVit
      Originally Posted by pacelattin View Post

      Groupon is a ponzi scheme in my opinion, been thinking about this all day. For them to work they keep on having to get more money than they pay out...
      Hmm, I do slightly agree with you, but let's throw a spanner in the works - Facebook did the same for the LONGEST time. They needed millions upon millions, and only recently turned a profit.

      It's the same with many large internet corporations. Even Google didn't turn a profit for a while, even during their public listing stage (I think)
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      • Profile picture of the author JCorp
        Originally Posted by MattVit View Post

        Hmm, I do slightly agree with you, but let's throw a spanner in the works - Facebook did the same for the LONGEST time. They needed millions upon millions, and only recently turned a profit.

        It's the same with many large internet corporations. Even Google didn't turn a profit for a while, even during their public listing stage (I think)


        I agree with you...

        We're about to start a tech company and from our projections it'll take between 2-5 years before we turn an actual profit. But with a solid short term and long term plan it all makes sense.

        Study the biggest internet corps online today and you'll see many of them didn't turn a profit until many years later.

        And how do they pay for payroll, expenses and things like that? Venture capital, investors, etc...
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  • Profile picture of the author Bruce NewMedia
    However, if the stock can be 'shorted', it might be worth doing so.
    If the collapse is imminent, and you can handle risk, it could be very profitable.
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    • Profile picture of the author Bill Farnham
      Originally Posted by Bruce NewMedia View Post

      However, if the stock can be 'shorted', it might be worth doing so.
      If the collapse is imminent, and you can handle risk, it could be very profitable.
      Bruce is right. The smart money should be looking to short this stock while it's still near the highs. Because this stock looks like it will soon turn stale.

      If you can afford having your broker loan you the shares this probably is as close to a sure bet as you're likely to see.

      ~Bill
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  • Profile picture of the author Suthan M
    They should offer a Groupon Deal to buy this joke stocks.. seriously..

    Apparently, its valued at 14Billion right now... I wonder how it can go up to 14Billion, with all the irregularities?
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  • Profile picture of the author Michael Tracey
    Sure Groupon's IPO is something I heartily recommend, invest every single cent you can lay your hands on...

    IF you want to lose your pants

    Michael
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  • Profile picture of the author SocialMediaOwls
    That's how you get mega rich in todays tech world (Groupon, twitter etc..)

    You give away $1 for $.50 and then tell investors "Look at all the eyeballs we get!!!!!"

    This has got to be worth a bundle!

    The only people that get rich are the insiders, everyone else loses.

    Groupon is the poster child for a poorly run BAD tech company
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  • Profile picture of the author PandaPoacher
    Not sure I'd even go with groupon on stock. I've never been a huge fan of groupon and buying stock in them just seems risky to me.
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  • Profile picture of the author VinceReed
    As a consultant I have had the displeasure of seeing Groupon in action and please answer me this.... why would a business give Groupon 50% and another 25% to the customer?... for a one shot burst in customers who aren't going to come back without a coupon? The customers don't come back and the business just gave away a whole bunch of free product...

    The only people who can afford Groupon are people whose products are already dramatically overpriced. I don't even want to talk about the actual mgmt. of the company.

    INVEST IN YOURSELF!

    Gamble in Vegas, not wall street.
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    • Profile picture of the author 728huey
      Groupon reminds me a whole lot of all those dot.com companies that flourished around 1999 that basically threw up a webpage and gave a wild sales pitch to investment firms like Goldman Sachs and Morgan Stanley to invest billions of dollars in companies that were destined to fail. The only difference now is that the big investment banks have already fleeced the U.S. housing market and Europe and need some new marks to sucker people to invest in. They're already heavily invested in Facebook and Twitter, even though both of those companies haven't exactly found a way to earn huge money yet.
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  • Profile picture of the author kolbywhite28
    Good time to invest. They look like they are expanding pretty fast in the last few years.
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  • Profile picture of the author Akogo
    From the little I read about the company, critics say their accounting of their revenues and expenses is questionable. Also, their business model is not unique enough. Some think they will end up like Webvan or Pets.com. There's a lot of competition, like Amazon. It's better to wait a few months to get a history of price and volume action and a few quarterly reports before even putting their stock on your watch list.
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  • Profile picture of the author roseca
    got confuse whether to invest or not.....
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  • Profile picture of the author RichMag
    As an owner of a small cleaning company Groupon is just a mess. I actually netowrk with some of my competetors that have used Groupon and it almost put them out of business. I cant believe these smart people gave away so much money. For example, they offered 3 hours of cleaning for $45. (about 50% off as the going rate in this area is $32.50 per hour). Groupon took half f that ($22.50) and that left them with $22.50 or a little over $7 per hour. These people got over 100 orders. What? Thats crazy.

    The business model is doomed to fail if you ask me as word gets around about them.
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