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I though that they were going to successfully IPO around the previous valuations. It's just been a supremely turbulent/volatile this summer and eyes have shift

I though that they were going to successfully IPO around the previous valuations. It's just been a supremely turbulent/volatile this summer and eyes have shifted to Tech IPOs commonly during downslopes. People have been considering if Tech IPOs are over-valued - not forgetting what happened just a couple years ago. My blog on the credibility of Groupon's IPO Valuation maybe wasn't so spot on. Granted, I voiced my thoughts on the IPO's validity much before the coaster ride investors have been on this summer. Blog from (6/18/11): http://jacobirw.wordpress.com/2011/06/18/groupon-pre-ipo-valuation-speculation/ http://jacobirw.wordpress.com/2011/06/18/groupon-pre-ipo-val... Despite the consensus on Groupon's overall unworthiness at this time, with new management (or a pivot under current) the Groupon IPO could be right back in the positive light of investors and the tech community alike. It must be remembered that they are now a resource for thousands upon thousands of business owners that have filled Groupon's pockets with over a billion in cash.* *Estimated 1.6 billion in 2011 fiscal year.

0x12 15y ago
>that have filled Groupon's pockets with over a billion in cash. Having 'cash on hand' is great but it seems that groupon owes more than they have by a considerable margin: http://finance.yahoo.com/news/Groupon-is-Effectively-minyanville-3764150861.html?asset&ccode&pos=3&sec=topStories&x=0 http://finance.yahoo.com/news/Groupon-is-Effectively-minyanv... Also that article says they have 208 million in cash, not nearly the 1.6 billion that you mention.
- JacobIrwin 15y ago
  Revenue is also cash - before expenses [they are collecting this amount]. I'm not suggesting that Groupon's 'operations activities' aren't responsible for pulling/keeping them in the red. However, investors like Warren Buffet look for high-earning and unprofitable companies quite frequently to get involved with - companies like Groupon. Reason being, with some direction by a strong [/new] board of directors (majority shareholders; highly-successful business leaders; wiki: 'See's Candies', 'Washington Post', 'Berkshire Hathaway'), a company can re-divert [i.e. 'pivot'] resources, slash out unprofitbale segments, etc., and successfully revive a titan. Response note: I garnered my figure of $1.6 billion based on a Dartmouth article here: http://www.tuck.dartmouth.edu/cds-uploads/case-studies/pdf/Groupon_Case_R2.pdf http://www.tuck.dartmouth.edu/cds-uploads/case-studies/pdf/G... -- see bottom of page two, second-to-last paragraph in the section titled, "The Fastest-Growing Business in History."
  - 0x12 15y ago
    That mentions revenues only, and you can't use that to translate directly to cash, they're not the same thing, you can't use those terms interchangeably. If a company has 100K in revenues and 50K in expenses per month after one month they'll have 50K in cash, to give a very limited example. So you have to take the revenues and reduce them by the burn rate to get an idea of how big groupons war chest really is. According to groupons own filings they've got 208 million in the bank so they've spent a good 1.4 billion of that money they took in. Of course 200+ million is still not exactly pocket change. I don't quite follow the Warren Buffet link, his only comment on groupon as far as I know is that he said he'd read their IPO filing papers but that was about it.
  - jacques_chester 15y ago
    > Revenue is also cash Please read an Accounting 101 textbook to learn why this isn't true.
    - JacobIrwin 15y ago
      "Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold." - Investopedia You may be thinking of 'marginal revenue' perhaps. I am talking to both of you. Tell me to read an accounting book - sure, if I have time after I am done buying a basket of financial sector out-of-the-money put options for the boutique hedge fund I manage this morning, I will be sure to do that. So yeah - while, I am brushing off my old 101 book, maybe you can try not to make yourself sound foolish in front of audience next time. http://www.investopedia.com/terms/r/revenue.asp#axzz1XG80HyjP http://www.investopedia.com/terms/r/revenue.asp#axzz1XG80Hyj... ^^^ Definition of 'revenue'. I.e., 'gross,' 'top-line,' 'nothing to do with expenses; yet.' http://www.investopedia.com/terms/m/marginal-revenue-mr.asp#axzz1XG80HyjP http://www.investopedia.com/terms/m/marginal-revenue-mr.asp#... ^^^Definition of 'marginal revenue.' http://dictionary.reference.com/browse/plebeian http://dictionary.reference.com/browse/plebeian ^^^Those that, by definition, never make it to the top 1%; ya both.
      - jacques_chester 15y ago

0x12 15y ago

>that have filled Groupon's pockets with over a billion in cash. Having 'cash on hand' is great but it seems that groupon owes more than they have by a considerable margin: http://finance.yahoo.com/news/Groupon-is-Effectively-minyanville-3764150861.html?asset&ccode&pos=3&sec=topStories&x=0 http://finance.yahoo.com/news/Groupon-is-Effectively-minyanv... Also that article says they have 208 million in cash, not nearly the 1.6 billion that you mention.

JacobIrwin 15y ago
Revenue is also cash - before expenses [they are collecting this amount]. I'm not suggesting that Groupon's 'operations activities' aren't responsible for pulling/keeping them in the red. However, investors like Warren Buffet look for high-earning and unprofitable companies quite frequently to get involved with - companies like Groupon. Reason being, with some direction by a strong [/new] board of directors (majority shareholders; highly-successful business leaders; wiki: 'See's Candies', 'Washington Post', 'Berkshire Hathaway'), a company can re-divert [i.e. 'pivot'] resources, slash out unprofitbale segments, etc., and successfully revive a titan. Response note: I garnered my figure of $1.6 billion based on a Dartmouth article here: http://www.tuck.dartmouth.edu/cds-uploads/case-studies/pdf/Groupon_Case_R2.pdf http://www.tuck.dartmouth.edu/cds-uploads/case-studies/pdf/G... -- see bottom of page two, second-to-last paragraph in the section titled, "The Fastest-Growing Business in History."
- 0x12 15y ago
  That mentions revenues only, and you can't use that to translate directly to cash, they're not the same thing, you can't use those terms interchangeably. If a company has 100K in revenues and 50K in expenses per month after one month they'll have 50K in cash, to give a very limited example. So you have to take the revenues and reduce them by the burn rate to get an idea of how big groupons war chest really is. According to groupons own filings they've got 208 million in the bank so they've spent a good 1.4 billion of that money they took in. Of course 200+ million is still not exactly pocket change. I don't quite follow the Warren Buffet link, his only comment on groupon as far as I know is that he said he'd read their IPO filing papers but that was about it.
- jacques_chester 15y ago
  > Revenue is also cash Please read an Accounting 101 textbook to learn why this isn't true.
  - JacobIrwin 15y ago
    "Revenue is calculated by multiplying the price at which goods or services are sold by the number of units or amount sold." - Investopedia You may be thinking of 'marginal revenue' perhaps. I am talking to both of you. Tell me to read an accounting book - sure, if I have time after I am done buying a basket of financial sector out-of-the-money put options for the boutique hedge fund I manage this morning, I will be sure to do that. So yeah - while, I am brushing off my old 101 book, maybe you can try not to make yourself sound foolish in front of audience next time. http://www.investopedia.com/terms/r/revenue.asp#axzz1XG80HyjP http://www.investopedia.com/terms/r/revenue.asp#axzz1XG80Hyj... ^^^ Definition of 'revenue'. I.e., 'gross,' 'top-line,' 'nothing to do with expenses; yet.' http://www.investopedia.com/terms/m/marginal-revenue-mr.asp#axzz1XG80HyjP http://www.investopedia.com/terms/m/marginal-revenue-mr.asp#... ^^^Definition of 'marginal revenue.' http://dictionary.reference.com/browse/plebeian http://dictionary.reference.com/browse/plebeian ^^^Those that, by definition, never make it to the top 1%; ya both.
    - jacques_chester 15y ago