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Groupon trading below $9
- capkutay 14y agoI wouldn't be too surprised to see Facebook stock head down the same path. If Facebook was trading at the same P/E ratio as Google, the stock would be worth $8 a share.
- freehunter 14y agoAt least it's an extra data point to show we're not in a startup bubble. If we were, these stocks would be skyrocketing no matter how bad the company was doing.
- nirvana 14y agoIn fact, how bad they are doing would be an asset-- "We're running as big a loss as we can so we can grow as fast as we can!" -- I think Amazon is still using that line. (though they are growing fast.)
- wtvanhest 14y agoThey also are not running a loss.
- microtherion 14y agoTrue, they are not, but I recently came across this rather stunning plot: http://www.mondaynote.com/wp-content/uploads/2012/05/Amazon-Revenue-and-Earnings.png http://www.mondaynote.com/wp-content/uploads/2012/05/Amazon-... Does this look like a hugely profitable company to you?
- wtvanhest 14y agoI don't think a graph that shows what an income statement of a high growth company always looks like should be considered "stunning". [Apple will be an exception here, but they are a very rare case, almost every other growth company looks like Amazon].
- bri3d 14y agoThey're not operating at a loss, so I'm not sure how they're using that line. I totally see your point (and agree) but there's an important distinction to make in Amazon's case, because there's a big difference between aggressively re-investing your profits into growth and aggressively burning other people's money to grow.
- chestercheetaz 14y agothe fact that all these social media stocks are declining is PROOF that we've been in a bubble, and now that bubble is deflating.
- astrodust 14y agoFacebook and GroupOn are too small a sample size to draw this conclusion. Have you accounted for general market trends? Seasonal cycles? Comparisons to other IPOs? Contrast with other types of companies that aren't part of your perceived bubble?
- nirvana 14y agoAAPL can generally be bought for under a 14 PE these days. An equivalent FB price would be $4.37. FB profit growth over the next decade may be much bigger than Apple's, but I have a lot more uncertainty about what it will be, so its hard to estimate a fair PE. Meanwhile there are Apple shares on sale every day that give me a rock bottom PE for a company with very persistent and fast growing profits. PE isn't everthing but I wish the press would talk more in terms of comparable valuations than the stock dollar price which doesn't really tell you much.
- chestercheetaz 14y agoFB is already headed down this path. Today (6/4/12) is the 11th trading session for FB, and the stock is down ~ 27% from it's IPO price. That's an averaged ~2% decline per day. Get ready for a fun ride DOOWWWWWNNN!
- pwny 14y agoMaybe it's my limited understanding of finance, but I have trouble understanding why people thought it was a good idea to invest in a coupon company in the first place.
- smackfu 14y agoMainly because you aren't appreciating how tech-savvy you are.
- dkokelley 14y agoHonestly, it has little to do with finance, and much to do with hype. It's not about fundamentals. It's about what the stock will be trading at in a month. If there was a track record of dog crap selling for twice its value every week, you would be stupid not to buy, right?! Sometimes there's just a bubble of one.
- aqme28 14y agoThis kind of trading is called growth investing[1] and is very common and is still popular within the financial world, despite the occasional setback. [1]: http://en.wikipedia.org/wiki/Growth_investing http://en.wikipedia.org/wiki/Growth_investing
- tomkarlo 14y agoThere's growth investing, and there's pure speculation (which may or may not involve growth companies.) He seems to be talking about the latter - buying in the hope of a "greater fool". Growth investing is based upon the idea that the purchased business will grow and the stock price will rise over time as a result.
- nirvana 14y agoAn IPO is a sale of stock. When selling any product there may be a guaranteed audience (e.g.: institutional investors) but groupon (and Facebook) both have the advantage that millions of regular consumers are aware of them. Thus, the average mom in illinois is far more likely to buy Groupon or FB than JDS-Uniphase or Applied Materials.
- thebdmethod 14y agoI know some people doing data entry jobs at groupon. 1- they hate their jobs. 2- many are hired as temp, and given absolutely crappy wages 3- they are being hired to do something that could easily be accomplished with some programming (i.e., taking data from one system and copy/pasting it verbatim into another system)
- jkuria 14y agoAndrew mason was quoted as saying: "We view self-service with the same skepticism that a company in California might view hiring a salesperson. And it's ended up working well for us." So perhaps they also view automation (software replacing humans doing repetitive tasks) with the same skepticism?
- jkuria 14y agoOriginal article: http://online.wsj.com/article/SB10001424052702303745304576365160251109224.html http://online.wsj.com/article/SB1000142405270230374530457636...
- larrys 14y agoThat's actually fascinating. And it makes sense from my perspective of a) having been involved years ago in selling coupons to small businesses and b) dealing with small businesses for other things. You need to give them a turnkey experience, hold their hand and make it easy for them. You show up with the "form" prefilled (I mean like a paper form) and say "sign here and I'll do the rest." And if you drop the paperwork off (say they are out to lunch) you put those little post-it arrows so they have nothing to think about. This is really big with that market. I'm not a fan of groupon but it impresses me that they are operating this way (and that Mason said that).
- pbreit 14y agoOnly programmers advise throwing code at something that is easily performed by humans. In this case, the humans are 1) more readily available than engineers, 2) cheaper and 3) more flexible.
- Apocryphon 14y agoIs LinkedIn the only successful Web 2.0 IPO of the past couple of years?
- gee_totes 14y agoDoes Google count?
- chestercheetaz 14y agoNo. Google IPO'd in 2004.
- pdubs 14y agoAmazon...and their P/E is around 175.
- chestercheetaz 14y agoAmazon IPO'd in the first dotcom bubble...
- pbreit 14y agoAmazon is Web 0.1.
- pdubs 14y agoYeah that whole computing services/cloud thing is pretty behind the times...
- epoxyhockey 14y agoTRIP - TripAdvisor
- druiid 14y agoI have to be honest.. I follow and trade stocks and I hadn't heard that the Groupon IPO actually occurred. The last I had heard they were having to re-file and all that fun stuff because their financials were essentially one great big lie. Due to all of this, I am not at all surprised the stock is at the level it is. IMHO the web-tech stocks released lately are all a big wash and pushing into Web 1.0 'bubble' territory, dangerously
- chestercheetaz 14y agoi'm having a hard time understanding how you follow the market and stocks, and yet missed the Groupon IPO. Maybe you were on vacation??
- druiid 14y agoI guess I must have been! I'm not trying to be hyperbolic or anything as well! Heh.
- chestercheetaz 14y agohaha well it's probably a good thing! Unless you short stocks...
- druiid 14y agoNah, no shorting, although when the FB stock was announced and shares made available I was wishing I had the money free for shorting those.
- chestercheetaz 14y agowell there's still time....."LOOK OUT BELOOWWWW!"
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- janlukacs 14y agoFB should buy GRPN to boost their stock.
- pbreit 14y agoMany recent tech (and non-tech) IPOs are also down significantly (FB, YELP, ZNGA, etc). So while Groupon does have some unique problems, it's also tracking not far off its peer group. But I know HN loves to hate on Groupon.
- corin_ 14y agoWhile "HN loves to hate on Groupon" isn't wrong, it (probably intentionally) implies that it's a HN-specific hive mind thing - whereas to me it seems the hate it based on plenty of pretty logical and objective issues with Groupon's business practices. I'm sure not everyone has the same view, but my feeling is that a.) those who don't hate on Groupon can at least appreciate why people do and not think it idiotic and b.) it's not specifically about HN people
- pbreit 14y agoI don't think it's very logical. I think most of the sentiment has to do with raising lots of money, growing very rapidly, making lots of easy money, etc. These are all things that many here are wary of.
- corin_ 14y agoIn my experience, start-up success is one of the universally supported things on HN, except in cases where it is viewed as undeserved.
- pbreit 14y agoI don't think the crowd here is very supportive of big time success when it is venture backed, involves large fund-raising and prioritized growth over profits.