I hadn’t noticed the slide in Groupon’s stock price … from the IPO price of around $25 to under $8 … a drop of almost 70%.
Groupon is starting to look like one of its own deals …
Source Business Week
Posts Tagged ‘Groupon’
Groupon: “You’re check is in the mail” … not!
November 10, 2011Though IPO investors disagree, I still think Groupon’s business model is suspect and market valuation is wacky.
Here’s the latest from the WSJ:
Rivals of Groupon are threatening the daily deal site leader by offering quicker payment to merchants, potentially jeopardizing a key part of the company’s business model.
Groupon, which offers online deals for local merchants, keeps itself in cash by collecting money immediately when it sells its daily coupons to consumers while dragging out payments to the merchants over 60 days.
For instance, a hair salon might run a deal offering $100 of services for just $50 on Groupon’s website, which then keeps as much as half of the total collected and sends the remainder to the salon in three installments about 25 to 30 days apart.
“You want to get paid in full as quickly as possible. We’re the ones that have to cover the cost of goods for giving away everything at half price,”
* * * * *
Groupon pays merchants in installments of 33% over a period of 60 days
LivingSocial pays merchants their full share in 15 days.
Amazon Local, pays immediately.
Google Offers promises 80% of the merchant’s cut within four days, and the remainder over 90 days.
Thanks to SMH for feeding the lead …
Today’s Deal: Groupon at 1/3 off … buy now?
October 20, 2011Punch line: Groupon’s IPO was originally expected to value the three-year-old company at between $15 billion and $20 billion … now, the company is talking $12 billion … still a huge deal, but heading south
In a stark comedown for what was expected to be one of the hottest stock offerings of the year, Groupon is scaling back plans for its public debut.
The Chicago company and its bankers will begin meeting with investors in the next few days to sell them on a deal that values the daily deals pioneer at less than $12 billion.
Groupon’s IPO was originally expected to value the three-year-old company at between $15 billion and $20 billion, according to people familiar with the matter.
The change comes in the wake of recent market volatility as well as several missteps by the company, the people said. Regulators have been scrutinizing Groupon’s accounting and the company was forced last month to change the way it books revenue.
Groupon plans to conduct its road show for investors next week.
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The size of the stock sale, expected to be completed in the next two weeks, could be $500 million to $700 million.The small offering, which would represent well under 10% of the company’s outstanding shares, is meant to cut the amount of stock being sold, in hopes that more shares can be sold later at higher prices
As we’ve said before, these guys will rue the day they turned down Google’s $5.5 billion offer …
For Groupon, suddenly, $5.6 billion is looking better …
October 19, 2011Punch line: Groupon’s luster – and valuation – are starting to fade. These guys will rue the day they sent Google packing.
Last year, four mutual fund companies – including Growth Fund of America, T. Rowe Price and Fidelity Investments — invested in Groupon at a price that valued the entire company at $4.7 billion,
Then, Groupon turned down an offer from Google reported to be just south of $6 billion?
At the time, Groupon was said to have potential IPO valuations ranging from $15 billion to as high as $30 billion.
But the U.S. IPO market has been largely dormant, the Securities and Exchange Commission has required more-conservative accounting from Groupon, and a top company executive has departed.
Some IPO analysts now predict a Groupon IPO, if completed, might value the company at $5 billion to $10 billion.
If the valuation keeps falling, some early-in funds may find themselves marking down the value of their holdings on their books.
Of course, I’m betting the under …
The Homa Files 