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An interesting take on Groupon: "Well, for starters, it’s not a coupon company nor a marketing company. At its core, Groupon’s U.S. business is a receivables f
by dirtyaura 15y ago
An interesting take on Groupon:
"Well, for starters, it’s not a coupon company nor a marketing company. At its core, Groupon’s U.S. business is a receivables factoring business, as I wrote last year. They give loans to small businesses at a very steep rate (the price of the discount plus Groupon’s commission). They get the money to fund these loans from credit card companies such as Chase Paymentech. Groupon is essentially a sub-prime lender that does zero risk assessment."
- RichardKim 15y agoI'm calling "shannigan!" No u.s. receivables factoring business has gross margins that they've got. What is Groupon - short-term loan sharks? Their reversal of NWC as they slow down their quarter-over-quarter growth and overall impact to cash flows is what every smart hedge fund analyst was pointing out for the past 2 quarters that underwriters like GS, BAML, MS and others were neglecting to put in their 100 page initiation coverage reports... BUT for most hedge fund PM's they could not figure out a way to short the stock because the company only floated like 5% of shares so the last time I checked, cost of borrowing to short the stock was ~45% per year. I mean for starters, Mason and mgmt. already dumped a ton of their shares. Why would they dump so much of their shares ahead of the IPO? He knew that IPOs usually have 6-9month lockup period where management can't sell their shares and it was a race against time for people to figure out their core business model.