I’ve never much liked Groupon……is the phrase I have used in many of my posts on the company. Groupon IPOed at $20 in Nov 11 and soon shot to $31. Within one short year the share price had plunged over 90% to $2.63. This led to Groupon’s founder, Andrew Mason, being fired.
Groupon was formed to promote its ‘daily deals’; many based around crowdsourcing where a minimum number of consumers needed to take part before the offer was consumated. But the experience of both users and suppliers was far from ideal. My problem, when I tested it out, was that the offers were a million miles from what I might be interested in. A cheap tooth inplant was one offer I got!
Last year Groupon launched a service selling discounted goods like TVs.
Latest results last night showed that Groupon’s core business continued to decline by another 17% to $419m in Q2. International revenues fell 26%. But those consumer sales rose 68%. A net loss of $7.6m was reported. This ‘excludes certain costs’. TechMarketView would be so, so profitable if we “excluded certain costs…”
Last night Eric Lefkofsky was anointed as Groupon’s CEO and a $300m share buyback was announced. Groupon has c$1.2b cash or cash equivalents. Groupon shares soared by 21% in after hours trading to $10.55 – still half its IPO price.
Of course there are many online providers of discounted consumer goods. Exactly what differentiates Groupon is beyond me. I’ll still use Groupon as one of my many examples of the ‘social bubble’ which I’d rather like to think is now over.