4 ms·

Interesting when taken in the context of yesterday's Unit Economics post. http://blog.samaltman.com/unit-economics http://blog.samaltman.com/unit-economics I

• seiji 11y ago
  Groupon was a deliberately calculated scam once it started getting huge investment though. Investors are always willing to burn the long term (the public) if they can pop the short term (themselves).
  • austenallred 11y ago
    [citation needed] Seriously though, the Groupon deal wasn't always ideal for every company, but how do you justify calling it a "deliberately calculated scam?"
    • seiji 11y ago
      things like http://www.sequenceinc.com/fraudfiles/2011/10/groupon-ipo-investors-beware-the-unaudited-financial-statements/ http://www.sequenceinc.com/fraudfiles/2011/10/groupon-ipo-in... or http://www.thinktrade.net/ipo-fraud.php http://www.thinktrade.net/ipo-fraud.php or http://www.bloomberg.com/news/articles/2013-09-20/groupon-loses-bid-to-dismiss-ipo-securities-fraud-lawsuit http://www.bloomberg.com/news/articles/2013-09-20/groupon-lo... or http://www.bloombergview.com/articles/2012-04-04/groupon-ipo-scandal-is-the-sleaze-that-s-legal http://www.bloombergview.com/articles/2012-04-04/groupon-ipo... (edit: we're talking about groupon the corporate entity, not the product(s) they offer.)
  • rhino369 11y ago
    If it was a scam they would have cashed out at the top.
    • seiji 11y ago
      The core group always gets to ignore the lockup period, so they do cash out at the top. "Early insiders are still fine, of course. Groupon co-founder Eric Lefkofsky and his affiliated entities took nearly $400 million off the table well before the IPO." from https://venturebeat.com/2012/06/01/groupon-investors-race-for-the-exits-as-lockup-ends/ https://venturebeat.com/2012/06/01/groupon-investors-race-fo... "The IPO produced billion-dollar windfalls for Mason, Lefkofsky and other early funders, and millions in fees for the Wall Street banks that took it public." from http://business.time.com/2012/04/05/groupon-faces-sec-probe-investor-lawsuit-as-stock-hits-new-low/ http://business.time.com/2012/04/05/groupon-faces-sec-probe-...
    • nck4222 11y ago
      Well, they basically did. "Altogether, $946.8 million, or roughly 86% of the funds raised across the three investments, was paid out to Groupon directors, officers and stockholders. Just $151.4 million was retained by the company to use as working capital and for general corporate purposes." June 2011 - http://mashable.com/2011/06/02/groupon-cash-out/#AoBOlTTNEqk8 http://mashable.com/2011/06/02/groupon-cash-out/#AoBOlTTNEqk...
      • joezydeco 11y ago
        That was an amazingly effective scam, and nobody putting into those F and G rounds said boo. Just mind-blowing.
        • fredkbloggs 11y ago
          It's mind-blowing that anyone would subscribe to an F or G round in the first place. That they would do so despite the obvious scammy nature of the whole thing is probably criminal, at least if they were managing OPM.
          • seiji 11y ago
            There was a comment yesterday about how investors only operate by FOMO ("fear of missing out"). Once you convince one, many more will follow. That's one reason this go-nowhere, do-nothing startup had so many investors: https://www.crunchbase.com/organization/clinkle https://www.crunchbase.com/organization/clinkle — it's all psychological games ungrounded in any sense of reality. Once you have one name brand investor on board, the other investors basically abdicate their entire decision making ability. If you've ever been turned down by a16z, you can legitimately go around saying investors think less of you than they think of clinkle.