Groupon is a huge, fun target but there are compelling fundamentals under all the noise and pre-IPO PR blunders:
1) "66% of Groupon deals are profitable for the seller, and 40% of businesses would not use Groupon again, according to a Rice University study."
http://www.quora.com/Groupon-IPO-S-1-Filing-June-2011/What-i...
2) Groupon has a hidden vat of PURE margin - breakage / un-redeemed deals that could be a shocking amount of money once financials are disclosed.
3) They have enormous growth potential in key markets which is why they are spending money like drunken sailors on customer acquisition. They can grow by 10x in the restaurant space alone.
http://answers.ask.com/Food_and_Drinks/Restaurants/how_many_...
4) Restaurants, spas, and other retail vendors have fixed (and perishable costs). This means that at particular times they can offer incredible deals as the alternative is burned or thrown out resources.
Groupon's team has indicated their #1 mission moving forward is to figure out this perishability equation.
Their VP says “If we can eliminate 10 percent of perishability, we can change the dynamics for small business owners,” he says. Small businesses would become more like airlines, matching supply against demand to maximize revenues."
http://moneyland.time.com/2011/03/18/impulse-shopping-2-0-gr...
1) "66% of Groupon deals are profitable for the seller, and 40% of businesses would not use Groupon again, according to a Rice University study."
http://www.quora.com/Groupon-IPO-S-1-Filing-June-2011/What-i...
2) Groupon has a hidden vat of PURE margin - breakage / un-redeemed deals that could be a shocking amount of money once financials are disclosed.
3) They have enormous growth potential in key markets which is why they are spending money like drunken sailors on customer acquisition. They can grow by 10x in the restaurant space alone.
http://answers.ask.com/Food_and_Drinks/Restaurants/how_many_...
4) Restaurants, spas, and other retail vendors have fixed (and perishable costs). This means that at particular times they can offer incredible deals as the alternative is burned or thrown out resources.
Groupon's team has indicated their #1 mission moving forward is to figure out this perishability equation.
Their VP says “If we can eliminate 10 percent of perishability, we can change the dynamics for small business owners,” he says. Small businesses would become more like airlines, matching supply against demand to maximize revenues."
http://moneyland.time.com/2011/03/18/impulse-shopping-2-0-gr...