Groupon’s Steady Disappointment of Investors
Posted by Ahmad Barirani in 
In a previous post, I was critical about the potential benefits that Groupon has to offer to consumers. My main argument is that while group buying seems to offer money saving opportunities by leveraging collective consumer action, it cannot compete with a retailer that can sufficiently guess future demand for a certain product. Since then, the company went public and bad news come almost by the month.
First, prior its IPO, sources have told Reuters to avoid groupon stocks because “the deals and coupon website operator has an unproven earnings record and slow growth… A $10 billion market value is a lot for a company with no profits and an unproven business model“. That’s nice!?
And matter of fact, it wasn’t long time after that Groupon announced that its 2011 fourth-quarter loss was wider than initially reported because “it needed to increase the amount of money it sets aside for refunds”. How about “we don’t have control over our own business model?”
Recently, Groupon has lost so much of its value that it is now worth half its initial IPO valuation. But still, management blames weak accounting processes. Nothing about the business model.
If you are interested in what its chart look like since the IPO:
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