Re:Try to digest the Groupon story
by jessedhillon on Friday June 03, 2011 @05:00PM
(#2617952)
> I disagree.
Based on nostalgic feelings about the 2000s?
Warren Buffet and his daughter wrote a whole book on how to go over a company's P&L statements line-by-line and determine whether or not it's a value. Groupon fails that test. That quote is about buying companies that are doing better than the market thinks they are -- and his methodology is a way to find and prove those cases on paper. Not with hunches.
Can you back this sentiment up with anything more than vague comparisons to Google?
If you're actually asking:
"Groupon is no Google today, but they do have a visionary founder, an incredible brand, insane revenue growth, and address a real problem for merchants and consumers."
or see my comments here:
http://news.ycombinator.com/item?id=2618080
and here:
Google was profitable. Big difference.
Re:Try to digest the Groupon story
by dannylipsitz on Friday June 03, 2011 @01:10PM
(#2617136)
Groupon isn't trying to pretend that they're profitable or that they'll be profitable in the near term. Smart long-term investors will look at their financials and their business model in order to make an educated bet on whether Groupon can successfully transition from astonishing hypergrowth to sustainable profitability -- preferably after the dust kicked up by the IPO clears.
Groupon are trying to pretend they're profitable — that's a major component of the original article here. They even made up a new accounting metric to try to persuade people of this (if you only avoid the pesky sales+marketing spend).
Re:Try to digest the Groupon story
by dannylipsitz on Sunday June 05, 2011 @11:32PM
(#2623581)
I think this "Adjusted CSOI" nonsense is tantamount to Groupon admitting that they're not profitable.
Google was profitable. And I assume any money they were spending was on architecture/moat not customers. I'm not sure what the economics of the Old Navy deal were yesterday but I assume it was a loss, on the day GRPN announced IPO they were losing money to "look good" it's how their business model works.
" losing money to "look good" it's how their business model works." that's the fundamental problem, their business model is losing money. These types of business models tend to drive poor stock valuations in the long term. See GM for example.
This reminds me of the pre-Google IPO arguments.
It became popular in the press to pot-shot Google in the days leading up to their IPO.
Their revenue model was too tied to search.
Their IPO structure wasn't sound.
Their biggest growth was behind them.
Groupon is no Google today, but they do have a visionary founder, an incredible brand, insane revenue growth, and address a real problem for merchants and consumers.