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Big fat I told you so (to anyone on HN I've predicted this to in the past)... Board Member/Director leaves... and what this signals: [1] Employees Confused.

Big fat I told you so (to anyone on HN I've predicted this to in the past)... Board Member/Director leaves... and what this signals: [1] Employees Confused. [2] Investors are going to really pissed off. [3] Stock is most likely going to continue to fall. (The signalling from this step down is huge). [4] It hints at possibility that the directors have had something to hide; something has been discovered; they have been secretly pushed out; or they have found out that something unethical has been going on in higher management and want to distance themselves from the company. Put another way, jumping out of a company when you aren't even pushed, when you are massively vested in it's success pretty much signals to everyone that Groupon is a sinking ship. If they haven't filed bankruptcy by 2013 I'd be mightily impressed! I can't wait to hear what Rocky Agrawal has to say about this.

joering2 14y ago
anyone would want to invent a time machine for a cool $5 billion dollars?? because that much Andrew Mason would pay you to get back to the table split seconds before he said "no" to Google's "we will pay you $6 billions for your website".
- hkmurakami 14y ago
  Why would Andrew Mason pay $5billion when the company is still worth $6.83B today? Giving away $5B to get the company's valuation to $6B would only make sense if Groupon were valued below $1B right now. (unless you're insinuating that in the near future, Groupon will be below this threshold, or even in bankruptcy)
  - joering2 14y ago
    its only worth $6 on your favorite stock website, same way as I am telling you this post is worth $100B just because I say so. By the time they would find someone to buy it (had to announce somehow to find a buyer) and sign all the documents, the stock would be a penny one, with a market cap around $500MM. Groupon stink before IPO and it will make people shorting it extremely rich, and unless rules of basic math like 1+1=5 or rules of economy won't change overnight, this will be one of the biggest deadpool everyone post-internet era has seen! I already bought a popcorn.
- xxbondsxx 14y ago
  Rumor has it that Google got a look at their books during the negotiation and cancelled the deal. They publicly gave the story of groupon denying Google to allow them to save face and attract more investors
  - OzzyB 14y ago
    That's very unnerving if it's true, because, by going along with "Groupon is worth $6bn because Google offered that to us and we turned it down", implies Google had a hand in creating that extremely high perception before their IPO. If Google did infact have the chance to look at the books (which I'm sure they did), and then allow that "$6bn meme" to circulate -- well, that's evil isn't it?
    - moocow01 14y ago
      I'd imagine in those negotiations there are agreements that everyone has to basically be tight lipped even after the deal falls apart. On the flip side, if Google had said too much it might make other business nervous to enter into negotiations with them in the future.
      - joe_the_user 14y ago
        Someone wasn't so tight lipped that the word didn't get out that they offered $6 billion for the company. If that wasn't true, someone in Google did have obligation to deny it - denying it off record with no further comment would hardly have been saying a lot.
    - moron 14y ago
      They would have gotten slimed with the evil moniker if they had decided to trash Groupon in the press. Damned if they [do|don't]. Adopting that slogan was one of the dumbest things they ever did, people love to bash them over the head with it.
    - Zarathust 14y ago
      I was not Google's job of sinking Groupon. It was also every investor's job to check the books before the IPO.
- mikeryan 14y ago
  Actually most of the early investors who would have won in that deal got a lot of money out from the later stage investors and more in the IPO. I'm not sure they'd have made more in that deal. Honestly most of the folks invested early made a ton of money and now the guys at the backend are looking for a chair as the music ends.
- sidman 14y ago
  Is it possible that the dodgy side of groupon was seen earlier and predicted earlier by the google MnA team and it wasn't Andrew Mason that said "No" ? Im sure if nothing has changed since the early days of groupon till now, the skeletons now are still the same as before, google was just smart about it, did the math and said no way and allowed Andrew to walk away and speak about the deal however he wished. On another note, if groupon collapses is it a good thing for the daily deals market ie, more smaller ones take their place, better competition better monetization strategy or does it spell the end for this market ? What do people think ?
tomrod 14y ago
Time to short the stock?
- gojomo 14y ago
  It's already beaten down, but I expect more nastiness for the price when they announce their quarterly fiasco^H^H^H^H^H^Hresults and the IPO lockups expire, both within a few weeks mid-May to early-June. Remember, stocks can go to zero!
- beedogs 14y ago
  About a month ago would've been better.
- eli_gottlieb 14y ago
  No. Right now, with the bad news already coming out, the harm is increasingly priced into the stock price. The time to short was when they IPO'd and half of everyone saw this coming. Normally I have a rule of "never short". Wish I'd broken it this time :-(.
  - carbocation 14y ago
    It's always been virtually impossible to borrow the stock in order to short it; the float is small and the cost of borrow is extremely high.
    - sidman 14y ago
      Yeh, i was looking/playing the puts and it was traded very thinly as well, took ages to get bites so didn't try again after i did it once.
  - MichaelApproved 14y ago
    Why never short?
    - fhars 14y ago
      Because a short has a hard limit on the possible gain (the amount you got when selling minus the borrowing cost, if you can buy it back at zero when you have to return the stock), but no limit on possible losses (if there is a rally or a short squeeze and the price at which you have to buy it back is ten or hundred times of what you sold it for). This is especially nasty if your trade partner knows you have shorted 40% of the traded stock and he controls 61%: he can demand any price he wants for the 1% you must buy from him to fulfill your side of the trade. http://www.nytimes.com/2008/10/30/business/worldbusiness/30iht-norris31.1.17372644.html?pagewanted=all http://www.nytimes.com/2008/10/30/business/worldbusiness/30i...
smackfu 14y ago
Can you really say "I told you so" when the threads about the IPO were full of people saying "this is a terrible idea, how can I short the stock?"

joering2 14y ago

anyone would want to invent a time machine for a cool $5 billion dollars?? because that much Andrew Mason would pay you to get back to the table split seconds before he said "no" to Google's "we will pay you $6 billions for your website".

hkmurakami 14y ago
Why would Andrew Mason pay $5billion when the company is still worth $6.83B today? Giving away $5B to get the company's valuation to $6B would only make sense if Groupon were valued below $1B right now. (unless you're insinuating that in the near future, Groupon will be below this threshold, or even in bankruptcy)
- joering2 14y ago
  its only worth $6 on your favorite stock website, same way as I am telling you this post is worth $100B just because I say so. By the time they would find someone to buy it (had to announce somehow to find a buyer) and sign all the documents, the stock would be a penny one, with a market cap around $500MM. Groupon stink before IPO and it will make people shorting it extremely rich, and unless rules of basic math like 1+1=5 or rules of economy won't change overnight, this will be one of the biggest deadpool everyone post-internet era has seen! I already bought a popcorn.
xxbondsxx 14y ago
Rumor has it that Google got a look at their books during the negotiation and cancelled the deal. They publicly gave the story of groupon denying Google to allow them to save face and attract more investors
- OzzyB 14y ago
  That's very unnerving if it's true, because, by going along with "Groupon is worth $6bn because Google offered that to us and we turned it down", implies Google had a hand in creating that extremely high perception before their IPO. If Google did infact have the chance to look at the books (which I'm sure they did), and then allow that "$6bn meme" to circulate -- well, that's evil isn't it?
  - moocow01 14y ago
    I'd imagine in those negotiations there are agreements that everyone has to basically be tight lipped even after the deal falls apart. On the flip side, if Google had said too much it might make other business nervous to enter into negotiations with them in the future.
    - joe_the_user 14y ago
      Someone wasn't so tight lipped that the word didn't get out that they offered $6 billion for the company. If that wasn't true, someone in Google did have obligation to deny it - denying it off record with no further comment would hardly have been saying a lot.
  - moron 14y ago
    They would have gotten slimed with the evil moniker if they had decided to trash Groupon in the press. Damned if they [do|don't]. Adopting that slogan was one of the dumbest things they ever did, people love to bash them over the head with it.
  - Zarathust 14y ago
    I was not Google's job of sinking Groupon. It was also every investor's job to check the books before the IPO.
mikeryan 14y ago
Actually most of the early investors who would have won in that deal got a lot of money out from the later stage investors and more in the IPO. I'm not sure they'd have made more in that deal. Honestly most of the folks invested early made a ton of money and now the guys at the backend are looking for a chair as the music ends.
sidman 14y ago
Is it possible that the dodgy side of groupon was seen earlier and predicted earlier by the google MnA team and it wasn't Andrew Mason that said "No" ? Im sure if nothing has changed since the early days of groupon till now, the skeletons now are still the same as before, google was just smart about it, did the math and said no way and allowed Andrew to walk away and speak about the deal however he wished. On another note, if groupon collapses is it a good thing for the daily deals market ie, more smaller ones take their place, better competition better monetization strategy or does it spell the end for this market ? What do people think ?

tomrod 14y ago

Time to short the stock?

gojomo 14y ago
It's already beaten down, but I expect more nastiness for the price when they announce their quarterly fiasco^H^H^H^H^H^Hresults and the IPO lockups expire, both within a few weeks mid-May to early-June. Remember, stocks can go to zero!
beedogs 14y ago
About a month ago would've been better.
eli_gottlieb 14y ago
No. Right now, with the bad news already coming out, the harm is increasingly priced into the stock price. The time to short was when they IPO'd and half of everyone saw this coming. Normally I have a rule of "never short". Wish I'd broken it this time :-(.
- carbocation 14y ago
  It's always been virtually impossible to borrow the stock in order to short it; the float is small and the cost of borrow is extremely high.
  - sidman 14y ago
    Yeh, i was looking/playing the puts and it was traded very thinly as well, took ages to get bites so didn't try again after i did it once.
- MichaelApproved 14y ago
  Why never short?
  - fhars 14y ago
    Because a short has a hard limit on the possible gain (the amount you got when selling minus the borrowing cost, if you can buy it back at zero when you have to return the stock), but no limit on possible losses (if there is a rally or a short squeeze and the price at which you have to buy it back is ten or hundred times of what you sold it for). This is especially nasty if your trade partner knows you have shorted 40% of the traded stock and he controls 61%: he can demand any price he wants for the 1% you must buy from him to fulfill your side of the trade. http://www.nytimes.com/2008/10/30/business/worldbusiness/30iht-norris31.1.17372644.html?pagewanted=all http://www.nytimes.com/2008/10/30/business/worldbusiness/30i...

smackfu 14y ago

Can you really say "I told you so" when the threads about the IPO were full of people saying "this is a terrible idea, how can I short the stock?"