12 ms·
Your analysis is wrong; here's why. The founders, employees, and other insiders of Groupon have already been handsomely paid off. For them, Groupon represents a
by chunkbot 16y ago
Your analysis is wrong; here's why. The founders, employees, and other insiders of Groupon have already been handsomely paid off. For them, Groupon represents a free option. If it sells for $6 billion, great! But what if in 12 months it could be worth $10 billion? That's $4 billion more! And, compared to a site like YouTube, Groupon looks like a much more stable deal. They're already immensely profitable (something YouTube never was, and still isn't). The $5.3 billion offer, as a multiple of revenue and profit, was a surprisingly cheap offer for Groupon!
Maybe Groupon will look back in 2 years with regret. Or maybe they'll have an offer of several billion dollars more. For the people in the position to make the decision, the risk is worth it.
Do you know somewhere else with as good a chance as Groupon of making several billion more dollars in a year?
- deleted 16y ago[deleted]
- meric 16y agoI agree with you but your rhetorical question isn't right. If you're Gates with several dozen billions, it is trivial to "earn several billion more dollars"; But if it means I have a 50% chance of losing 10 billion and 50% chance earning 7 billion I wouldn't do it. The same goes for groupon; From the outside it looks like the founders are risking their entire 5.3 billion for a mere 100% increase in a couple of years time. Of course, like other comments say, we know very little; but I do concur with the original comment saying it looks crazy.
- erikpukinskis 16y agoTechCrunch reported they'll do 50m in profit this year, so it's not exactly cheap. If they were to stop growing it'd take 100 years for Google to get their investment back in cash. The question is when they'll stop growing.
- ebun 16y agoCan you (or anyone) elaborate on "The founders, employees, and other insiders of Groupon have already been handsomely paid off."? My understanding is that the handsome payoff comes when the company is either bought out or IPO's