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Groupon Puts IPO On Hold
With his first accepted submission, quantr tips news that Groupon's IPO plans, which triggered skepticism about its high valuation and furthered claims of a new dot-com bubble, have been put on hold amid regulatory concerns and worries about "market volatility." According to the WSJ, "When the company filed to go public in early June, it attracted criticism for its high marketing costs and unprofitable business. The company was also asked by the Securities and Exchange Commission to remove an unusual accounting metric, dubbed Adjusted Consolidated Segment Operating Income, which painted a more robust picture of its performance. Last week, the SEC also contacted a Groupon attorney over a different matter, said a person familiar with the situation: a leaked internal memo from Groupon Chief Executive Andrew Mason to his staff, in which he touted the company and blasted its critics. Making public statements about the financial status of a company during an IPO process is prohibited by SEC rules."
Who gives a shit? Stop wasting time/attention with that crap.
We know where leadership by an anti-intellectual "strongman" who scapegoats minorities and likes boisterous rallies goes
a spam organization would lie to me
Goupon's stock after IPO will be worth as much as its coupons.
There's a local Indian eatery my wife and I enjoy from time to time. The service was always excellent until the time when our visit happened to coincide with a Groupon special. We walked in and noticed right away that the place as far busier than usual. Unfortunately that had a detrimental effect on the service, which stank and we were pissed off once we learned it was a Groupon night, as we paid full price for crap service and we are regulars.
Too bad for the restaurants in large cities which get sucked into trying Groupon. You place gets filled for one night with cheapskates, who then move on to the next Groupon deal restaurant the following night, and so on... You f'd over regular customers for a bunch of 20-somthing cheapskates - we have not returned and may not.
The whole point of coupons and specials is to get people to try your restaurant and then come back if the person likes it. However with Groupon I doubt very much this works as the only people using Groupon are the types that are eating at the next local Groupon special as all they care about is the deal.
Did you ever wake up in the morning, with a Zombie Woof behind your eyes? -- FZ
I don't know what Google was thinking offering them $6B for the company a while back, but I especially don't know what Groupon's owners were thinking for not taking it. Yes, most of it would be in Google stock, that's just fine (even though it would decline a bit after everybody figured out that Groupon was a dumb idea at that price.) Yes, they'd lose a lot of their autonomy, but you don't build a coupon-advertising company to change the world, you build one to make money, and that was real money.
Bill Stewart
New Fast-Compression-only CPR http://preview.tinyurl.com/dy575ks
Groupon was an idiot for not taking Google's buyout offer. Groupon isn't Amazon, it's not ebay. Nothing it does demands customer loyalty. If Groupon takes 5% of a restaurant's gross for that night (I'm making that number up) in exchange for 250 customers, what's to stop Noupon ("New Groupon") from promising the same amount of customers but for only 4% of the night's take? Groupon is a great idea, but unfortunately one that is easy to copy and do way better. Just google "Groupon regrets" and you'll see how little loyalty their customers and clients have for them.
Someone pinch me, am I dreaming? Surely something must be wrong....
The so-called "Web 2.0" fad is on its way out. It hasn't lived up to expectations, and in many ways has caused a huge amount of disappointment and trouble for many people. Privacy has become scarce, and people are subjected to ever-increasing amounts of pointless advertising, or just straight out useless information. The "community" aspect has turned out to be one big manufactured load of marketing bullshit.
Even the massively-hyped Web 2.0 technologies have shown to be failures when applied to real problems, where data actually has value and reliability is important. Ruby on Rails applications often have horrible performance and poor maintainability. NoSQL databases can barely be called "databases" due to their tendency to lose data and the most inopportune times. JavaScript is an absolute joke. HTML5 is by far the shittiest standard of our day.
Web 2.0 is on its way out, and I don't think that any average person is really going to miss it.
I'm going to unfriend you now.
Drill baby drill - on Mars
wow .. you sir are an asshole
Only insofar as he lacked tact in outlining his observation. The observation itself is likely accurate. I've got full time employment, but I could probably free lance enough to come close to my salary.
The world's burning. Moped Jesus spotted on I50. Details at 11.
Groupon is one of the companies that should have their market cap measured in years in prison.
Contrary to the popular belief, there indeed is no God.
Saying somebody's unemployed in IT therefore they must without skills is rude and idioitic. There are different people in different circumstances and there is a thousand reasons the guy could be unemployed (staring with illness). So yeah, in my book the the guy is an asshole.
That may be .. my point is that arrogant assholes like that guy see an unemployed person (I was in that boat for a while few years ago) and often assume lack of skill/laziness etc, which really rubs me the wrong way.
I think what he meant to say is "I'd really hate to be an unskilled laborer/worker right now.", in which case he's right. the days of walking out of high school into your dad's old cannery job and doing it until you retire are long gone.
Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
Remember offers like that are contingent. They aren't a "Company A makes offer, Company B says 'I accept' and it is done there, no further discussion." Had Groupon said they were interested, the next step in negotiations would have happened. Specifically, NDAs would be signed and Google would get to go over their assets with a fine tooth comb. They'd see all their financials, what all they have in terms of people, material, IP, and so on, and then decide if they wanted to go through with the deal.
It is the same sort of thing as when you buy a house. When you make an offer and the seller accepts, that is the first step, not the last. There are more things done like an appraisal by the bank, a home inspection, a title search, and so on. If it turns out there's a problem, you don't buy it. That you had said you would was contingent on everything going right.
So my bet is Groupon knew they couldn't survive the scrutiny, and that if Google then backed out, it would be damaging. While Google would likely be NDA bound not to say why, questions would be asked and investors would figure it out, they'd realize that Google had found that Groupon was BSing.
I think they hoped they could pull a fast one on people in IPO. Remember while there's public disclosure it wouldn't necessarily be as intense as Google's examination and more importantly, people wouldn't have to look at anything. If they got caught up in the fervor and bought, well then tough shit for them. It's all on the people who buy the stock to do their due diligence.
That's my bet. They knew that Google wouldn't bite once they knew the full story.
but Groupon's biggest issue is the fact that it's very difficult to differentiate itself. Yes, they were the first one to achieve any critical mass as to what they do. However, it doesn't really require any kind of exclusivity - very few people subscribe to multiple cable companies or cellular carriers, whereas it's much easier to subscribe to 3 or 4 Groupon clones. The kind of people who regularly use the service also likely use a few others, which means that Groupon's success hinges upon which companies are willing to do business with them as opposed to the clones. Similarly, Groupon users are only as loyal as long as Groupon can have better deals than everyone else, on products people want.
tl;dr: Groupon is in the business of selling bargains to bargain hunters, which means that loyalty rarely factors into the equation; the lack of loyal customers in a market with a low barrier to entry doesn't bode well for an IPO.
should have been 'blaring fucking klaxons' too but the SEC did, basically, nothing.
same for Bernie Madoff
same for the Credit Derivative Product Companies
same for the Auction Rate Securities
same for the Monoline insurance companies
same for alot of things.
That's why you make a very large no fault breakup payment part of the acceptance. Deutsche Telekom did this with the AT&T merger and looks likely to make $3B and still get to sell the company to someone else.
There are 4 boxes to use in the defense of liberty: soap, ballot, jury, ammo. Use in that order. Starting now.
Yes, this is a crucial point. With an IPO, they are required by the SEC to issue a prospectus. However, the SEC makes no claims to actually review said prospectus, so the document could say "we have no revenue and an unsustainable business model and we want to burn your money in a big bonfire" for all they care.
An internal memo itself is not a public statement. If material information (such as the internal memo in question) is accidentally leaked to the public, the SEC requires the information to be broadcast as "now public" information within 24 hours. This is intended to reduce the impact of "tipster"-style insider trading. It sounds like there are additional restrictions on IPOs, but I am less familiar with those rules.
Pretty much. The safest way to avoid breaking the rules is to minimize the spread of material insider knowledge.
+1 awesome
Even the massively-hyped Web 2.0 technologies have shown to be failures when applied to real problems, where data actually has value and reliability is important. Ruby on Rails applications often have horrible performance and poor maintainability. NoSQL databases can barely be called "databases" due to their tendency to lose data and the most inopportune times. JavaScript is an absolute joke. HTML5 is by far the shittiest standard of our day.
Does netcraft confirm it?
There was already some fairly convincing comment when the IPO was first announced that Groupon operated like a ponzi with later investors paying for the early investors to exit. The IPO, should it ever happen has disaster written all over it. I wonder what deep discounts investors can look forward to on their stock when the realisation sinks in.
a leaked internal memo [...] public statements prohibited
Is anybody else not seeing why this is a problem?
I mod down anyone who says "I will be modded down for this", regardless of the rest of their comment
The story is not important to him. All he wanted was to see if his website would hold the load of being /.'ed
The latest developments in stock market are such that too many people believe they need to buy a "social media" type of stock but they can't get their hands on FB.
We just had this story - Zynga Seeks $1 Billion In IPO. Well, everybody was trying to go IPO. LinkedIn is another example.
The point to recognize is that none of these companies are actually profitable, yet they are seeking billions of dollars in IPO sales, because the new model is such that you start a website, some form of 'social media' and then you spend a bunch of money to get revenue going. As long as you can show revenue, nobody is paying attention to your actual profits, and you have none. All of these valuations are based on cash flow, not on profits, which is ridiculous, don't buy into this hype.
You can't handle the truth.
If regulars can't expect the same service every time, can the restaurant expect the same payment every time?
Gosh yeah, he sure feels self entitled, only thing he does is pay and probably tip and expect service in return. How DARE HE! Burn him I say! Whip his ungrateful body until he begs for cold food and crap service as the undeserving dog he is.
MMO Quests are like orgasms:
You may solo them, I prefer them in a group.
In 2010 Groupon lost $456M.
Let's put that money in perspective:
- That's like crashing a Bugatti Veyron nearly once per day. Almost exactly once per day if you assume they get their money for the scrap metal back.
- That's like crashing a Cessna Citation X (high-end business jet) roughly once every 18 days.
- That's roughly equal to crashing an A380, then getting another one half-built, and setting it on fire within a year.
- That's nearly 1/3rd the cost of the Burj Khalifa, except with nothing to show for it.
"When information is power, privacy is freedom" - Jah-Wren Ryel
FYI - You have to wait for 30 days to short the IPO - those are the regs. There are some execptions for market makers. Put options may be safer, but, once again, they may not be aviliable right off the bat.
Well - kind of. The SEC does some reviewing but....
The big point is that the outside auditors and the invesment banks do sign off on it. And while there is a fine line between hopeful optimism and fraudulent statements of facts, the auditors and banks can pay big fines if they find themselves on the wrong side.
"Why'd you leave your last job?" "Those guys were assholes and the depression! DemOgrats! Froth-froth-froth!" "Thanks. We'll call you."
Dewey, what part of this looks like authorities should be involved?
To maximize the irony please post as much as you can in this subthread.
Their fault or not, it's now public.
Where Did Groupon's Billion Dollars Go?
The checkered past of Groupon's chairman
i like your post very much... but i just read 'The Asylum' by Leah McGrath Goodman.
if the CFTC describe in her book is anything like the SEC... punishment is sometimes kind of random. guys doing awful things get no punishment, and guys doing minor things get sent to Riker's Island for years. its kind of weird.
i would love to see some more evidence that you can provide though?
it reminds the masses that they too can partake of the fabulous wealth that comes from being a slashdot submitter.
not only will your hair become full and lush, your abs spontaneously pectate, the chicks will dig you!
or if you are gay, the guys.
whatever. you get the idea.