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Groupon Puts IPO On Hold

Soulskill posted about 3 years ago | from the holding-out-for-a-better-group-rate dept.

Businesses 129

With his first accepted submission, quantr tips news that Groupon's IPO plans, which triggered skepticism about its high valuation and furthered claims of a new dot-com bubble, have been put on hold amid regulatory concerns and worries about "market volatility." According to the WSJ, "When the company filed to go public in early June, it attracted criticism for its high marketing costs and unprofitable business. The company was also asked by the Securities and Exchange Commission to remove an unusual accounting metric, dubbed Adjusted Consolidated Segment Operating Income, which painted a more robust picture of its performance. Last week, the SEC also contacted a Groupon attorney over a different matter, said a person familiar with the situation: a leaked internal memo from Groupon Chief Executive Andrew Mason to his staff, in which he touted the company and blasted its critics. Making public statements about the financial status of a company during an IPO process is prohibited by SEC rules."

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With his first accepted submission... (3, Insightful)

dcollins (135727) | about 3 years ago | (#37322076)

Who gives a shit? Stop wasting time/attention with that crap.

Re:With his first accepted submission... (2, Informative)

elbonia (2452474) | about 3 years ago | (#37322108)

+1000, it adds nothing to the article. WTF is the purpose of pointing out a user's 1st submission?

Re:With his first accepted submission... (4, Interesting)

real gumby (11516) | about 3 years ago | (#37322160)

WTF is the purpose of pointing out a user's 1st submission?

It reminds everybody that it isn't just the same set of contributors, and that it's worth submitting a story. I like it, actually.

Re:With his first accepted submission... (1)

Ihmhi (1206036) | about 3 years ago | (#37322692)

I remember the days when you'd see a coondoggie submission nearly every day.

Re:With his first accepted submission... (1)

ceoyoyo (59147) | about 3 years ago | (#37322400)

The Slashdot editors probably want to point out that they don't ONLY post stories submitted by a few favoured blog spammers.

Actually, maybe they took some flak for it because there's been a lot less of the usuals lately.

Re:With his first accepted submission... (1)

Bill, Shooter of Bul (629286) | about 3 years ago | (#37322484)

The last site upgrade made it pretty much unusable. I took a six month break from actively participating. it seems to be more usable now. If It still takes me 1 minute to post, I'll disappear for another year. But yes, some of the spam was pretty annoying. It was cute for the first ten years, but its been getting old. Fewer good stories, fewer insightful comments. Less reason to spend time here.

Re:With his first accepted submission... (2)

Bieeanda (961632) | about 3 years ago | (#37322290)

It's four words. Jesus, get a grip on yourself.

Re:With his first accepted submission... (0)

Anonymous Coward | about 3 years ago | (#37322364)

"With his first accepted submission, quantr tips news that "

Actually that's 9 words out of a total of 161 words which equal to about a bit less then 6% of the summary....

: P /Completely Off Topic like this whole thread

Re:With his first accepted submission... (1)

Myopic (18616) | about 3 years ago | (#37322604)

"than" /I have equaled your correction.

Re:With his first accepted submission... (1)

dcollins (135727) | about 3 years ago | (#37323002)

It's the second time today. Here's another. [slashdot.org] I'll let you compute the infinite sum if this is the new ongoing protocol.

Re:With his first accepted submission... (0)

Anonymous Coward | about 3 years ago | (#37322396)

Who gives a shit? Stop wasting time/attention with that crap.

It was clearly submitted by GroupOn or someone working with them who knows full well their worthless and going public would mean a 0.01 stock price in under a day. They asked to be removed and they violated SEC to get removed - they know their fucked and want to ride the VC out as long as possible in the meantime.

Re:With his first accepted submission... (0)

Anonymous Coward | about 3 years ago | (#37324058)

It was clearly submitted by GroupOn or someone working with them who knows full well their worthless and going public would mean a 0.01 stock price in under a day. They asked to be removed and they violated SEC to get removed - they know their fucked and want to ride the VC out as long as possible in the meantime.

Basically you don't ride out VC's... In addition to the founders and employees being screwed by dillution when this happens. The VCs usually find some more investors /suckers to kick in a new round of financing (often angels, pension funds, hedge funds, patent trolls, vendors, customers, and sometimes other companies with too much money like Google, Amazon, Microsoft, etc). Sometimes when nobody steps up, they open up the round to friends and family to screw the koolaid drinkers...

Meanwhile, vendors (and affiliates and contractors and businesses) don't get paid and anything worth any $$$ is mortgaged to the hilt, employees start getting deferred bonuses, and then deferred wages, employees leave and buy their vested options (just in case the lottery hits), which keeps things going long enough until the whole thing crashes and the VCs sell the carcass to the highest bidder...
Or something like that... Rather than leak a memo, might as well just look for another job...

Re:With his first accepted submission... (1)

edumacator (910819) | about 3 years ago | (#37324576)

Are we really that cynical/lazy/ADD that we have to criticize one small phrase in the summary? Relax.

Stress test on his website (1)

alex67500 (1609333) | about 3 years ago | (#37324702)

The story is not important to him. All he wanted was to see if his website would hold the load of being /.'ed

Just how much money is Groupon losing? (2)

GameboyRMH (1153867) | about 3 years ago | (#37325656)

In 2010 Groupon lost $456M. [maximumpc.com]

Let's put that money in perspective:

- That's like crashing a Bugatti Veyron nearly once per day. Almost exactly once per day if you assume they get their money for the scrap metal back.

- That's like crashing a Cessna Citation X (high-end business jet) roughly once every 18 days.

- That's roughly equal to crashing an A380, then getting another one half-built, and setting it on fire within a year.

- That's nearly 1/3rd the cost of the Burj Khalifa, except with nothing to show for it.

who would have thought (2)

planimal (2454610) | about 3 years ago | (#37322098)

a spam organization would lie to me

Mark my words. ... (2, Funny)

Anonymous Coward | about 3 years ago | (#37322110)

Goupon's stock after IPO will be worth as much as its coupons.

Re:Mark my words. ... (2)

Ken Broadfoot (3675) | about 3 years ago | (#37322126)

I agree...
Groupon "seems" to be a strange scheme...
Not as transparent, as say, my sig line! :P

Re:Mark my words. ... (0)

Anonymous Coward | about 3 years ago | (#37322330)

Can't wait the IPO to short their stock...

Re:Mark my words. ... (1)

ub3r n3u7r4l1st (1388939) | about 3 years ago | (#37322656)

it will be hard, you have to wait at least 3 days. Buying their put options is a much better bet.

Well, 30 days (1)

alexander_686 (957440) | about 3 years ago | (#37326120)

FYI - You have to wait for 30 days to short the IPO - those are the regs. There are some execptions for market makers. Put options may be safer, but, once again, they may not be aviliable right off the bat.

The Web 2.0 fad is on its way out. (0)

Anonymous Coward | about 3 years ago | (#37322122)

The so-called "Web 2.0" fad is on its way out. It hasn't lived up to expectations, and in many ways has caused a huge amount of disappointment and trouble for many people. Privacy has become scarce, and people are subjected to ever-increasing amounts of pointless advertising, or just straight out useless information. The "community" aspect has turned out to be one big manufactured load of marketing bullshit.

Even the massively-hyped Web 2.0 technologies have shown to be failures when applied to real problems, where data actually has value and reliability is important. Ruby on Rails applications often have horrible performance and poor maintainability. NoSQL databases can barely be called "databases" due to their tendency to lose data and the most inopportune times. JavaScript is an absolute joke. HTML5 is by far the shittiest standard of our day.

Web 2.0 is on its way out, and I don't think that any average person is really going to miss it.

Re:The Web 2.0 fad is on its way out. (3, Funny)

fiannaFailMan (702447) | about 3 years ago | (#37322332)

The so-called "Web 2.0" fad is on its way out. It hasn't lived up to expectations, and in many ways has caused a huge amount of disappointment and trouble for many people. Privacy has become scarce, and people are subjected to ever-increasing amounts of pointless advertising, or just straight out useless information. The "community" aspect has turned out to be one big manufactured load of marketing bullshit.

Even the massively-hyped Web 2.0 technologies have shown to be failures when applied to real problems, where data actually has value and reliability is important. Ruby on Rails applications often have horrible performance and poor maintainability. NoSQL databases can barely be called "databases" due to their tendency to lose data and the most inopportune times. JavaScript is an absolute joke. HTML5 is by far the shittiest standard of our day.

Web 2.0 is on its way out, and I don't think that any average person is really going to miss it.

I'm going to unfriend you now.

Re:The Web 2.0 fad is on its way out. (1)

Dr Herbert West (1357769) | about 3 years ago | (#37323122)

+1 awesome

Re:The Web 2.0 fad is on its way out. (1)

DrXym (126579) | about 3 years ago | (#37324290)

Even the massively-hyped Web 2.0 technologies have shown to be failures when applied to real problems, where data actually has value and reliability is important. Ruby on Rails applications often have horrible performance and poor maintainability. NoSQL databases can barely be called "databases" due to their tendency to lose data and the most inopportune times. JavaScript is an absolute joke. HTML5 is by far the shittiest standard of our day.

Does netcraft confirm it?

A Groupon pitfall (3, Interesting)

al0ha (1262684) | about 3 years ago | (#37322140)

There's a local Indian eatery my wife and I enjoy from time to time. The service was always excellent until the time when our visit happened to coincide with a Groupon special. We walked in and noticed right away that the place as far busier than usual. Unfortunately that had a detrimental effect on the service, which stank and we were pissed off once we learned it was a Groupon night, as we paid full price for crap service and we are regulars.

Too bad for the restaurants in large cities which get sucked into trying Groupon. You place gets filled for one night with cheapskates, who then move on to the next Groupon deal restaurant the following night, and so on... You f'd over regular customers for a bunch of 20-somthing cheapskates - we have not returned and may not.

The whole point of coupons and specials is to get people to try your restaurant and then come back if the person likes it. However with Groupon I doubt very much this works as the only people using Groupon are the types that are eating at the next local Groupon special as all they care about is the deal.

Re:A Groupon pitfall (1)

dada21 (163177) | about 3 years ago | (#37322200)

I run a little private forum where my friends and their friends can post businesses that offer Groupons so we can avoid them.

I thought about creating a free smartphone app that let's you check if a business ever ran a deal with a daily deal site. I don't do daily deals -- and I expect full service at a full price.

Re:A Groupon pitfall (0)

Anonymous Coward | about 3 years ago | (#37322866)

I suppose I have protected myself from that by living in a small college town that isn't covered by any of the daily-deal sites. It's easy to divide restaurants into two categories: those that are listed on campusfood.com and those that aren't. I won't say I'm a snob and only go to the latter -- there's a time and a place for everything.

Re:A Groupon pitfall (1)

WNight (23683) | about 3 years ago | (#37323770)

Ohhh, good idea. I haven't noticed the problem myself but a lot of people complain about coupon redeemers so they'd probably try a free app to avoid them.

It's got iPhone written all over it.

It sounds fun. Have you written this sort of thing before? Were you serious?

If not I might do a web app of it - scrape Groupon/etc and build a list of what to avoid and when.

Re:A Groupon pitfall (1)

RoverDaddy (869116) | about 3 years ago | (#37322206)

I'm surprised that this kind of thing would happen, because as far as understand it there's no such thing as a 'Groupon Night'. You may only have a couple days to -buy- the Groupon, but once you have it, you usually have weeks or months to use it. Why would all the Groupon people show up at once?

Unless, perhaps, that particular restaurant -chose- to make their Groupon so specific, in which case it sounds like it's their own fault they got hammered.

Re:A Groupon pitfall (0)

Anonymous Coward | about 3 years ago | (#37322512)

This typically happens the day the groupon expires, sometimes a year after people bought it. I tried to go to a favorite place in Austin and called ahead... The hostess told me their groupon was expiring and the place was booked all night.

-Chris

Re:A Groupon pitfall (1)

RoverDaddy (869116) | about 3 years ago | (#37322520)

That makes sense. No avoiding that I guess.

Re:A Groupon pitfall (1)

GauteL (29207) | about 3 years ago | (#37325128)

"No avoiding that I guess."

Of course they could. GroupOn could stagger the expiry dates. I.e. add one day to the expiry date for every week the offer has run, or something similar. They could also provide a randomised offset to the expiry date to avoid everyone getting a voucher with the same expiry date.

Re:A Groupon pitfall (1)

Dynedain (141758) | about 3 years ago | (#37322538)

Groupon does do "tonight only" deals, I think it's called GroupOn Now or something like that.

Re:A Groupon pitfall (-1)

Anonymous Coward | about 3 years ago | (#37322232)

so - let me get this straight:

1) you are a regular at a restauraunt - which presumably means you care about its continued sucess
2) the owners of the restraunt, also caring about its continued sucess, sign up for a groupon night to try and attract business
3) this is wildly sucessful, unfortunately to the detriment of service
4) you give up going there entirely - based on one night of bad service when the owners are admittedly doing an out of the ordinary promotion
5) you reneg on #1 - effectively disproving you ever gave a crap about the place, and also the owners / managers / employees, etc.

you crazeh, and no better than '20-something cheapskate groupon people who only care about 'the deal''

Re:A Groupon pitfall (1)

c0lo (1497653) | about 3 years ago | (#37322344)

1) you are a regular at a restauraunt - which presumably means you care about its continued sucess

Check your assumptions. You are right only if you define success as "more business, more money".
Because if you define success as "quality of service and good/stable patrons", all your argumentation above fails.

Re:A Groupon pitfall (1)

wmbetts (1306001) | about 3 years ago | (#37322504)

Hello bank? I'd like to pay my loan with quality of service and stable patrons. What, you only accept money?!

Almost everyone will tell you a successful business is one that makes money.

Re:A Groupon pitfall (1)

c0lo (1497653) | about 3 years ago | (#37322594)

Hello bank? I'd like to pay my loan with quality of service and stable patrons. What, you only accept money?!

Almost everyone will tell you a successful business is one that makes money.

In my mind, there's a difference between "making money" and "making lots of money" - many times the later is detrimental to the quality of service.
Granted, we are discussing now on hypothetics: you assume that without the extra money that indian restaurant will die, I assume that it was greed involved. Without the specifics, neither of us can argument in this particular case.

Re:A Groupon pitfall (1)

wmbetts (1306001) | about 3 years ago | (#37322622)

Very true, neither us really know. If was just greed then I agree with you.

Re:A Groupon pitfall (0)

Anonymous Coward | about 3 years ago | (#37322458)

When I go to a restaurant, it's for the menu, service, location, ambience, etc. But ultimately, as with any other business transaction, it's because they provide a service at a price I consider reasonable, not because I care about their continued success.

But let's say, hypothetically, you go to a restaurant because you care about them. Then they treat you like shit and give other people discounts. Hmm, sounds like the restaurant doesn't care about you.

In conclusion, you're a retard for multiple reasons. Go choke on a dick yourself you cocksucking, cum guzzling piece of shit.

Re:A Groupon pitfall (1)

Nursie (632944) | about 3 years ago | (#37322902)

You f'd over regular customers for a bunch of 20-somthing cheapskates - we have not returned and may not.

Not that I'm disagreeing with your central point, but the only person I know who actually uses Groupon is my mother, who is quite some way from her 20s now.

Re:A Groupon pitfall (0)

Anonymous Coward | about 3 years ago | (#37323102)

Unfortunately that had a detrimental effect on the service, which stank and we were pissed off once we learned it was a Groupon night, as we paid full price for crap service and we are regulars.

Being too crowded can definitely destroy a restaurant experience but I'm a bit puzzled by your anger.

From the details you provide, it sounds like the restaurant tried Groupon and it didn't work out - so I could imagine feeling sad for the restaurant - but maybe there's some details you're leaving out - e.g. the restaurant is owned by a large corporation and the decision to use Groupon was made by the CEO (who gets the typical CEO compensation of tens of millions per year).

I mean, sure, the planet is absolutely saturated with all kinds of horrific injustice - towards which a deep seated rage may be entirely appropriate - but the particular incident you describe seems incredibly trivial.

Re:A Groupon pitfall (1)

quacking duck (607555) | about 3 years ago | (#37323138)

You f'd over regular customers for a bunch of 20-somthing cheapskates - we have not returned and may not.

I'm curious why you'd write them off completely based on a single night. Sure, it was a bad business decision on their part--they like many others might not have known the serious issues with doing Groupon promos. And yes, you paid full price for crap service that one night. If you're a regular, can't you try speaking to the owner next time you're there to explain yourserious issues with them last time, and give them at least one chance to make things right for you?

I admit my crappy service threshold is a tad high--it took three bad experiences at two locations before I gave up on a franchise.

Re:A Groupon pitfall (1)

smellotron (1039250) | about 3 years ago | (#37323422)

I admit my crappy service threshold is a tad high—it took three bad experiences at two locations before I gave up on a franchise.

I don't think that's high. I agree, it doesn't make sense to write off a restaurant for a single bad experience after repeated good experiences. "Vote with your dollar" is the usual mantra, but for a small/local restaurant "Talk to the manager" is probably more effective.

Perhaps the GP was already on the fence about the establishment, with the raw GroupOn deal only being the "last straw".

Re:A Groupon pitfall (1)

tlhIngan (30335) | about 3 years ago | (#37323566)

I'm curious why you'd write them off completely based on a single night. Sure, it was a bad business decision on their part--they like many others might not have known the serious issues with doing Groupon promos. And yes, you paid full price for crap service that one night. If you're a regular, can't you try speaking to the owner next time you're there to explain yourserious issues with them last time, and give them at least one chance to make things right for you?

One thing about being a regular is, especially for small businesses, the owners or employees know you. Even if they're harried they'd stop and say hello, or even a simple "sorry, we're really busy tonight."

Hell, some businesses go out of the way to apologize.

The customer shouldn't need to demand attention and service - they should be getting it all the time. A regular shouldn't need to talk to the owners at all - they should've come over and apologized directly.

This is especially true in the restaurant business where patrons may literally go next door.

Hello bank? I'd like to pay my loan with quality of service and stable patrons. What, you only accept money?!

Almost everyone will tell you a successful business is one that makes money.

And a successful business depends a lot on repeat customers who can provide a base level of income consistently. It costs way more money to recruit a new customer than to keep an existing one, and existing ones often serve as unofficial marketing agents.

Sites like Groupon don't promote that, often devalue the product, and in general, if a business is so desparate for business that they're willing to take a 50% cut in revenue in order to get a bunch of customers who they'll never see again (Groupon customers are the worst kind of customers a business can get - people in it for the deal), things aren't boding well.

Re:A Groupon pitfall (0)

Anonymous Coward | about 3 years ago | (#37324422)

If the worst kind of customer is one who's just showing up for a deal I'd hate to hear what you think about weekly sales fliers being delivered direct to people's doors.

What a bunch of assholes.

Re:A Groupon pitfall (2)

DerekLyons (302214) | about 3 years ago | (#37323824)

Regulars accept that service is not identical from night to night. You're not a regular, you're a jackass with a self-entitlement complex.

What a load (1)

SmallFurryCreature (593017) | about 3 years ago | (#37325060)

If regulars can't expect the same service every time, can the restaurant expect the same payment every time?

Gosh yeah, he sure feels self entitled, only thing he does is pay and probably tip and expect service in return. How DARE HE! Burn him I say! Whip his ungrateful body until he begs for cold food and crap service as the undeserving dog he is.

Re:A Groupon pitfall (1)

GauteL (29207) | about 3 years ago | (#37325166)

"Regulars accept that service is not identical from night to night"

Yes. But most also expect to pay as little as others on the same night. If you release lots of half price vouchers to people but let your regulars eat full price on that same night, you can't expect them to be happy about it if they find out. Deals offered only to new customers often piss their existing customers off and I've certainly changed mobile phone operator before, simply so I could get a "new customer" deal.

If this restaurant wanted to keep their regular customers happy, they should have apologised to the regulars and offered them their meal at a discount.

They should have taken Google's offer (3, Insightful)

billstewart (78916) | about 3 years ago | (#37322172)

I don't know what Google was thinking offering them $6B for the company a while back, but I especially don't know what Groupon's owners were thinking for not taking it. Yes, most of it would be in Google stock, that's just fine (even though it would decline a bit after everybody figured out that Groupon was a dumb idea at that price.) Yes, they'd lose a lot of their autonomy, but you don't build a coupon-advertising company to change the world, you build one to make money, and that was real money.

Re:They should have taken Google's offer (4, Insightful)

sunfly (1248694) | about 3 years ago | (#37322340)

Exactly, $6b was a huge premium, and was likely peek valuation.

The IPO is on hold because investors are figuring out that Groupon is not profitable, the business model is too easy to duplicate, and customers are starting to figure out it was not worth the cost and trouble.

Re:They should have taken Google's offer (1)

Anonymous Coward | about 3 years ago | (#37322342)

and it's no surprise that from the guy who didn't take google's $6B offer we also get this gem:

"...he touted the company and blasted its critics. Making public statements about the financial status of a company during an IPO process is prohibited by SEC rules."

so, with all the IPO wealth on its way to his pockets, he didn't bother to inform himself about pre-IPO rules -- or at least hire the right people (lawyers) who could inform him. wow.

Re:They should have taken Google's offer (1)

blueg3 (192743) | about 3 years ago | (#37322874)

Informing yourself about IPO rules is pretty unlikely. They're not exactly simple. On the other hand, not hiring a bevy of financial advisers and lawyers and then taking their advice? Pretty dumb.

Re:They should have taken Google's offer (1)

DrXym (126579) | about 3 years ago | (#37324888)

It sounds like Groupon's communications VP walked just prior to this email going out. Of course it might be a coincidence or it might be that he was strongly advised not to do what he was doing, chose to do it anyway and the VP resigned rather than be party to it.

Re:They should have taken Google's offer (0)

Anonymous Coward | about 3 years ago | (#37322760)

They did not take the offer because if they did, they would have to let Google in to see exactly how the company functions. They knew it was all a scam and a kind of Ponzi scheme. If Google decided against the deal after going through the books , the company would have become immediately worthless. Otherwise they would have happily taken the money.

Re:They should have taken Google's offer (1)

blueg3 (192743) | about 3 years ago | (#37322890)

and a kind of Ponzi scheme

For fuck's sake, Slashdot:
Not every scam is a Ponzi scheme.
Not every situation is just like 1984.
Not all science is about global warming.
Not everything is about the free market.

Groupon is not anything like a Ponzi scheme.

Re:They should have taken Google's offer (0)

Anonymous Coward | about 3 years ago | (#37323176)

Groupon is not anything like a Ponzi scheme.
    But it is. See this blog from the artcle
      http://techcrunch.com/2011/06/13/why-groupon-is-poised-for-collapse/

Re:They should have taken Google's offer (1)

jjohnson (62583) | about 3 years ago | (#37323908)

However, this remains true: every /. poster who disagrees with you, is like Hitler.

Problem is I think they knew they couldn't get it (3, Interesting)

Sycraft-fu (314770) | about 3 years ago | (#37322792)

Remember offers like that are contingent. They aren't a "Company A makes offer, Company B says 'I accept' and it is done there, no further discussion." Had Groupon said they were interested, the next step in negotiations would have happened. Specifically, NDAs would be signed and Google would get to go over their assets with a fine tooth comb. They'd see all their financials, what all they have in terms of people, material, IP, and so on, and then decide if they wanted to go through with the deal.

It is the same sort of thing as when you buy a house. When you make an offer and the seller accepts, that is the first step, not the last. There are more things done like an appraisal by the bank, a home inspection, a title search, and so on. If it turns out there's a problem, you don't buy it. That you had said you would was contingent on everything going right.

So my bet is Groupon knew they couldn't survive the scrutiny, and that if Google then backed out, it would be damaging. While Google would likely be NDA bound not to say why, questions would be asked and investors would figure it out, they'd realize that Google had found that Groupon was BSing.

I think they hoped they could pull a fast one on people in IPO. Remember while there's public disclosure it wouldn't necessarily be as intense as Google's examination and more importantly, people wouldn't have to look at anything. If they got caught up in the fervor and bought, well then tough shit for them. It's all on the people who buy the stock to do their due diligence.

That's my bet. They knew that Google wouldn't bite once they knew the full story.

Re:Problem is I think they knew they couldn't get (1)

afidel (530433) | about 3 years ago | (#37322988)

That's why you make a very large no fault breakup payment part of the acceptance. Deutsche Telekom did this with the AT&T merger and looks likely to make $3B and still get to sell the company to someone else.

Re:Problem is I think they knew they couldn't get (0)

Anonymous Coward | about 3 years ago | (#37324768)

I think that the risk here is very different and Google's board would not have been able to sign off on that kind of agreement in the way that AT&T felt that they could - in particular T-Mobile is a public company and quite a lot of the numbers that underpin the logic of a deal are in the public domain and signed off by auditors.

I think Google's shareholders would have been rightly very angry if a payment for an asset with an unknown value was made - they had to have a way to value it properly before they could offer any money at all.

Re:Problem is I think they knew they couldn't get (1)

smellotron (1039250) | about 3 years ago | (#37323046)

I think they hoped they could pull a fast one on people in IPO. Remember while there's public disclosure it wouldn't necessarily be as intense as Google's examination and more importantly, people wouldn't have to look at anything.

Yes, this is a crucial point. With an IPO, they are required by the SEC to issue a prospectus. However, the SEC makes no claims to actually review said prospectus, so the document could say "we have no revenue and an unsustainable business model and we want to burn your money in a big bonfire" for all they care.

Re:They should have taken Google's offer (0)

Anonymous Coward | about 3 years ago | (#37323164)

I think it's an interesting case study. When Google buys a "great idea" and then kills the product, maybe it was really a "groupon idea" and not viable in the long run.

Re:They should have taken Google's offer (0)

Anonymous Coward | about 3 years ago | (#37323504)

The $6 billion offer was simply a rumor. It is highly doubtful Google offered them this amount. Groupon is known for "leaking" various bits of information to the press to prop up the pyramid scheme they have going with investors.

First Submission (0)

Anonymous Coward | about 3 years ago | (#37322252)

With his first accepted submission, quantr

Congratulations quantr, great to have you on board :)

Grope On (0)

Anonymous Coward | about 3 years ago | (#37322260)

I like Grope On. I am one of those unemployed IT people who uses it. Restaurants are a dime a dozen. If one goes bankrupt because of Grope On so what? Perhaps the new restaurant will be a different type of cuisine in the same location when I come in again with my next Grope On Coupon. I am unemployed and I want the depression to get worse. So the more bankruptcies the better. Let's relive the 1930's. All I see is dumb tea baggers, idiot DemOgrats and even more stupid Rebuplicans. If the government did not bail out the banks (which they still are doing by the way) and send some people to jail this depression would have been over. PEOPLE the depression hasn't even started yet, Just Wait. Meanwhile I will keep going to Grope ON to help the depression along.

Re:Grope On (0)

Anonymous Coward | about 3 years ago | (#37322306)

Your ideas intrigue me and I wish to subscribe to your newsletter.

Re:Grope On (0)

devleopard (317515) | about 3 years ago | (#37322320)

Why unemployed? I don't know any IT people who can't find work, either salaried or freelance. You must be one of those folks without skill who didn't deserve to be in the industry to begin with.

Re:Grope On (1)

okooolo (1372815) | about 3 years ago | (#37322346)

wow .. you sir are an asshole

Re:Grope On (2)

MightyMartian (840721) | about 3 years ago | (#37322384)

Only insofar as he lacked tact in outlining his observation. The observation itself is likely accurate. I've got full time employment, but I could probably free lance enough to come close to my salary.

Re:Grope On (2)

okooolo (1372815) | about 3 years ago | (#37322448)

Saying somebody's unemployed in IT therefore they must without skills is rude and idioitic. There are different people in different circumstances and there is a thousand reasons the guy could be unemployed (staring with illness). So yeah, in my book the the guy is an asshole.

Re:Grope On (0)

Anonymous Coward | about 3 years ago | (#37322492)

When you are employed at a great place, you get sick, you get 95% of your salary until 65 and then you have your full pension.
I could freelance at 250$/hr but I don't I prefer para-public stability and security to tons of money.

Re:Grope On (1)

okooolo (1372815) | about 3 years ago | (#37322532)

That may be .. my point is that arrogant assholes like that guy see an unemployed person (I was in that boat for a while few years ago) and often assume lack of skill/laziness etc, which really rubs me the wrong way.

Re:Grope On (1)

interval1066 (668936) | about 3 years ago | (#37322638)

I think what he meant to say is "I'd really hate to be an unskilled laborer/worker right now.", in which case he's right. the days of walking out of high school into your dad's old cannery job and doing it until you retire are long gone.

Re:Grope On (0)

Anonymous Coward | about 3 years ago | (#37322746)

All those words, and no Micro$$$$$oft? Son, I am disappoint.

How's that $5 billion looking now? (2, Insightful)

Anonymous Coward | about 3 years ago | (#37322308)

Groupon was an idiot for not taking Google's buyout offer. Groupon isn't Amazon, it's not ebay. Nothing it does demands customer loyalty. If Groupon takes 5% of a restaurant's gross for that night (I'm making that number up) in exchange for 250 customers, what's to stop Noupon ("New Groupon") from promising the same amount of customers but for only 4% of the night's take? Groupon is a great idea, but unfortunately one that is easy to copy and do way better. Just google "Groupon regrets" and you'll see how little loyalty their customers and clients have for them.

Re:How's that $5 billion looking now? (1)

MightyMartian (840721) | about 3 years ago | (#37322352)

I agree. This was a con where the con-artist got greedy and overreached. They should have taken Google's money and ran for the hills. Now they're going to be revealed as an empty bag of air.

Re:How's that $5 billion looking now? (1)

Alascom (95042) | about 3 years ago | (#37322358)

Parent comment is right on the mark! Except for the 5%... Try 30-40%. And yeah, I bet GroupOn is looking back on that offer from Google and wishing they would have taken it.

Re:How's that $5 billion looking now? (0)

Anonymous Coward | about 3 years ago | (#37322370)

Five minute abs!

Re:How's that $5 billion looking now? (1)

SpiralSpirit (874918) | about 3 years ago | (#37322450)

The google offer was contingent on seeing their books, and I bet if google had seen their books a bit closer there would be no $5billion offer.

Re:How's that $5 billion looking now? (1)

Billly Gates (198444) | about 3 years ago | (#37323776)

Oh no only $5 billion how will they afford anything but Top Rameon noodles to the cofounders.

Please ... Ego must be insane in these clowns! If I were offered $25 million ... that is hundres of times less ... I would smile and say yes and retire rich. That is a ton of money. $5 billion is what the Google CEO's are probably really worth if you count their actual revenue rather than Wall Street valuations. Seriously even if they only owned 10% of the company that is $500 million in cash.

I would be happy and use that money for another startup or 4 vaction homes and no more work again in my life. The founders are not worth it one bit. It is just insane what some people think they are getting paid compared to what most people struggling in this economy make as the value they provide.

I cannot believe the SEC is doing it's job (1)

decora (1710862) | about 3 years ago | (#37322314)

Someone pinch me, am I dreaming? Surely something must be wrong....

Re:I cannot believe the SEC is doing it's job (1)

optimism (2183618) | about 3 years ago | (#37322468)

Oh yes, they're doing their job.

They just aren't working for the people that you think they're working for. ;)

Re:I cannot believe the SEC is doing it's job (0)

Anonymous Coward | about 3 years ago | (#37322702)

It should be a blaring fucking klaxon screaming that something is horribly, horribly wrong with GroupOn and that their business model is toxic waste. Cf. the Facebook investment round that the SEC nixed for Americans as being terrifying dangerous.

Synthetic CDOs full of bets on subprime mortgages (1)

decora (1710862) | about 3 years ago | (#37322986)

should have been 'blaring fucking klaxons' too but the SEC did, basically, nothing.

same for Bernie Madoff

same for the Credit Derivative Product Companies

same for the Auction Rate Securities

same for the Monoline insurance companies

same for alot of things.

Re:Synthetic CDOs full of bets on subprime mortgag (0)

Anonymous Coward | about 3 years ago | (#37323232)

Exactly the point. Given how much the SEC doesn't take a good, hard look at, the few things that do prick the slumbering dragon enough to come down hard on an IPO ought to be regarded as terrifyingly bad business practices so far beyond the pale, even in a Wall Street turned Vegas that's forgotten what a pale is, that anyone with any sense should run far, far away from the offending company and never look back. The SEC saying, "GroupOn's accounting practices are unusual," after not squashing Madoff is basically equivalent to them chanting, "Holy balls of St. Artemius, for GroupOn verily surpasseth even the Cretans in mendacity, even the leprous whores of Babylon in procacity; it showeth itself an abomination yea verily even in the eyes of Mammon, whose greedy and glorious Invisible Hand rewardeth even the guilty, so that His coming rebuke of GroupOn and the fire and brimstone that cannot but fall upon these foulest of bastard reprobates shall be a sign unto all the nations for generations of generations; and among those foolish enough to lay a wooden nickel upon the tables of the moneychangers for the sake of GroupOn, there will be a wailing and a gnashing of teeth; may this IPO be anathema."

Wait, how those crooks are still in business? (1)

Alex Belits (437) | about 3 years ago | (#37322444)

Groupon is one of the companies that should have their market cap measured in years in prison.

di34 (-1)

Anonymous Coward | about 3 years ago | (#37322576)

at deatTh'S door [goat.cx]

I work for one of groupons many service providers (0)

Anonymous Coward | about 3 years ago | (#37322578)

its all totally legit dude :D

fuckin eh

Internal Memo vs. Public Statements (0)

Anonymous Coward | about 3 years ago | (#37322582)

So, sending an internal memo to your staff is somehow a public statement now?

I guess during an IPO executives aren't allowed to talk about the companies financials to any of their employees? Must make it hard to actually complete an IPO!

Re:Internal Memo vs. Public Statements (1)

smellotron (1039250) | about 3 years ago | (#37323096)

So, sending an internal memo to your staff is somehow a public statement now?

An internal memo itself is not a public statement. If material information (such as the internal memo in question) is accidentally leaked to the public, the SEC requires the information to be broadcast as "now public" information within 24 hours. This is intended to reduce the impact of "tipster"-style insider trading. It sounds like there are additional restrictions on IPOs, but I am less familiar with those rules.

I guess during an IPO executives aren't allowed to talk about the companies financials to any of their employees?

Pretty much. The safest way to avoid breaking the rules is to minimize the spread of material insider knowledge.

I forgot who said it (2)

Voyager529 (1363959) | about 3 years ago | (#37322830)

but Groupon's biggest issue is the fact that it's very difficult to differentiate itself. Yes, they were the first one to achieve any critical mass as to what they do. However, it doesn't really require any kind of exclusivity - very few people subscribe to multiple cable companies or cellular carriers, whereas it's much easier to subscribe to 3 or 4 Groupon clones. The kind of people who regularly use the service also likely use a few others, which means that Groupon's success hinges upon which companies are willing to do business with them as opposed to the clones. Similarly, Groupon users are only as loyal as long as Groupon can have better deals than everyone else, on products people want.

tl;dr: Groupon is in the business of selling bargains to bargain hunters, which means that loyalty rarely factors into the equation; the lack of loyal customers in a market with a low barrier to entry doesn't bode well for an IPO.

Re:I forgot who said it (1)

blueg3 (192743) | about 3 years ago | (#37322894)

Not that I disagree, but the same can be said of a lot of services -- discount chains, social media platforms, etc.

Re:I forgot who said it (2)

dcollins (135727) | about 3 years ago | (#37323042)

I'll counter-argue:
- Discount chains have the higher barrier to entry of brick-and-mortar storefronts, physical product, and delivery systems.
- Social media platforms have the lock-in (effective loyalty) of positive network effects.

Of course neither is insurmountable, but it's a damn sight better than emailing some coupons to end-users.

Their real biggest issue... (0)

Anonymous Coward | about 3 years ago | (#37323836)

...is the $930,000,000.00 in investor money that the people running the scam have already walked off with.

It isn't a coupon website, it's a "get money from investors and split" scam.

If you think I made up that money amount, google: $930 million groupon

Re:I forgot who said it (0)

Anonymous Coward | about 3 years ago | (#37324426)

no, groupon is in the business of selling bad deals to businesses and then dumping those on users.

they achieved high visibility and high business sign up through aggressive marketing to businesses - and burnt a lot of money, both their own money and businesses money on it.

"it's all right if we do loss at each sale, we'll make it up with volume" is exactly the groupon thinking.

Groupon is doomed to fail (2)

DrXym (126579) | about 3 years ago | (#37324334)

Groupon have massive overheads, countless other companies offer similar services (often on more favourable terms for businesses), they're generating bad word of mouth everywhere they go and their daily deals are turning to crap. Businesses are slowly realising that offering the same goods and services at 25% income to a bunch of random freeloaders is not a good promotion. Groupon site visitors are slowly realising that more and more offers are along the lines of fish pedicures, eyebrow waxes, haircuts and so on.

There was already some fairly convincing comment when the IPO was first announced that Groupon operated like a ponzi with later investors paying for the early investors to exit. The IPO, should it ever happen has disaster written all over it. I wonder what deep discounts investors can look forward to on their stock when the realisation sinks in.

Internal = Public? (1)

shish (588640) | about 3 years ago | (#37324346)

a leaked internal memo [...] public statements prohibited

Is anybody else not seeing why this is a problem?

What is IPO and Groupon? (0)

Anonymous Coward | about 3 years ago | (#37324780)

I have no clue and it did not become clear after a blick on TFA. Fail.

They are stuck (1)

roman_mir (125474) | about 3 years ago | (#37324972)

The latest developments in stock market are such that too many people believe they need to buy a "social media" type of stock but they can't get their hands on FB.

We just had this story [slashdot.org] - Zynga Seeks $1 Billion In IPO. Well, everybody was trying to go IPO. LinkedIn is another example.

The point to recognize is that none of these companies are actually profitable, yet they are seeking billions of dollars in IPO sales, because the new model is such that you start a website, some form of 'social media' and then you spend a bunch of money to get revenue going. As long as you can show revenue, nobody is paying attention to your actual profits, and you have none. All of these valuations are based on cash flow, not on profits, which is ridiculous, don't buy into this hype.

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