The misery for Groupon just gets worse. See Groupon slumps lower than IPO price. Now to add to the cupcake debacle, Groupon is to be investigated by the Office for Fair Trading after breaking advertising regulations 50 times in the last year. Something of an all-comers record!
Readers must be bored with my negative views on Groupon by now. So let’s move on to the whole social media/Web 2.0 ‘Bubble’ – because that’s what it is. Although we like LinkedIn, it was never worth anything like its IPO price – let alone the $6.6b it is ‘worth’ at today’s valuation.
Next month we get the IPO of Zynga – of Farmville fame. Must admit that dreaming up my Mo
ney for nothing, but the chicks ain't free headline for my first Zynga story, all those year back, gave me much pleasure. Thus proving what a sad life I lead. At least Zynga is profitable – recording profits of $31m on revenues of $809m in the first 9 months of the year. But the IPO at between $8.50 and $10 a share values them at c$7b – a PSR of 9. Mind you that is less than the $10b valuation they attracted in their last fundraising round in Feb 11.
The problem with Zynga is that it just could be a passing fad. Reports already show new nett users slowing. We all know that yesterday’s Farmville can be today’s Angry Birds and tomorrow’s…well, if I knew that I’d be a billionaire too.
Then, of course, we come to the current granddaddy of them all – Facebook. Current media hype puts a valuation of $100b on Facebook and a suggested Q2 2012 IPO with as much as $10b of shares being floated. That would make it easily the biggest IPO of all time. Media suggests Facebook revenues of $4b in 2011 and $6b in 2012 – so that’s a PSR (multiple of future sales – note sales NOT profit!) of c17.
If it looks like a Bubble. If it feels like a Bubble….