11/24/15

This will be my 4th posting over the years on the pathetic subject of Groupon.

Why is it worth this kind of attention?

It really is not. Maybe I enjoy being right from time to time in such a decisive manner.

I guess I am in the ugly mood for schadenfreude (see my previous post). Who knows?

The bottom line is this:

In a short appearance on CNBC yesterday, Groupon founder, former CEO, and investor Andrew Mason (who was ousted few years ago) claimed that Groupon still has a future.

Its stock price and the prevailing mood in the market say otherwise.

Here is what I said in prior posts:

1) “My Prediction: The Demise of Groupon”

It is my belief that the business model promoted by Groupon and their many imitators is flawed and I predict the demise of Groupon, as we know it today, within the next few years.

That already came true as Groupon, after an IPO that raised a lot of money, tried to change the business model but failingly has not found anything that will give it a strong foundation.

2) “Beware the IPO of Groupon”

I repeat my warning in my above-mentioned Blog…this will be a debacle for the annals of business history!

Just to be clear, the pre-IPO valuation of Groupon in the private market was $20 billion! The IPO price valued it at about $10 billion.

Six months after they went public, the shares were at 25% of its IPO price—a loss of 75%. That was in 2012.

The shares now—three years, many machinations, and even more money raised and wasted later—are at 50% of THAT 25% of IPO price.

Remarkably, the company before the IPO, in its perceived hay days, was offered $6 billion in cold hard CASH to be bought out by Google and refused it.

To be clear, Groupon never had a hay day; it was always based on a flawed business model that was never going to work, as I explained in my earlier postings in detail.

3) “Groupon: I Told You So!”

The Groupon business model is BAD for their clients.… These clients are LOSING money by using the Groupon model and they are simply running out of first-time vendors of any quality to fool . . . . You cannot fool all the people all the time . . . . Where are all the analysts who are supposed to understand this?

Indeed, where are they all?