Short Groupon?


By SFace   Follow   Fri, 4 Nov 2011, 11:09am   3,597 views   25 comments
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I lot of people seems to think Groupon is spectacularly hyped, a company that adds little value relative to their valuation, which I generally agree. However, there's lots of interest and not a lot of shares in circulation so momentum/sentiment whatever that is or created can carry the shares price alone.

Any thoughts on the prospects of Grpn in 1-3 years? I will enter a small short position just for the education aspect of it.

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  1. corntrollio


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    1   3:14pm Fri 4 Nov 2011   Share   Quote   Permalink   Like   Dislike (1)  

    We've discussed this in prior threads -- see my responses in this thread: http://patrick.net/forum/?p=748561

    I wouldn't discourage a short based on all the stuff I said before. Google Offers is already undercutting them, e.g. by offering a $25 offer for $15 (so the margin is now 60% instead of 50% already).

  2. pkennedy


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    2   9:40pm Fri 4 Nov 2011   Share   Quote   Permalink   Like   Dislike  

    I have heard a lot of negatives on groupon from the merchant side. I think they've been summed up here pretty well. Basically bargain hunters that swarm your business, figure out how to maximize the groupon deal beyond what's been offered and then never return.

    Someone mentioned shorting it today, and I had the same thought when I saw it hit $30. 18B for a coupon site? No way.

    But you're right it's a stock that many are familiar with, only a few shares out there. Momentum might make it shoot way up from here. It will fall, it's just a matter of when, and how much pain can you take waiting for it to fall in the event it takes off.

  3. FortWayne


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    3   9:49pm Fri 4 Nov 2011   Share   Quote   Permalink   Like (2)   Dislike (1)  

    i'm going to short it. I usually don't gamble, but this is a rare moment.

  4. Nomograph


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    4   7:19am Sat 5 Nov 2011   Share   Quote   Permalink   Like (1)   Dislike (2)  

    FortWayne says

    i'm going to short it. I usually don't gamble, but this is a rare moment.

    I was going to short as well, but after reading your post I've changed my mind.

    A person could do very well in life doing the exact opposite of what you do.

  5. mdovell


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    5   8:19am Sat 5 Nov 2011   Share   Quote   Permalink   Like (1)   Dislike (1)  

    Funny you mention that because it has been discussed a tad in another blog.

    http://baselinescenario.com/2011/11/01/whats-wrong-with-groupon/#more-9420

    Technically how is it simply more than just a email list? Don't get me wrong I've used it...but there's also a few other copy cats out there. I don't buy everything, in fact it is actually pretty rare since it isn't really a specific group each and every time.

    IPO's this year have been not just bad but really bad.

    Renren is down from 18 to under 6!
    Linkedin is down about 10%
    zipcar down maybe 40%
    friendfinder down 66%
    homeaway down 10%

    Yeah spirit airlines has done well..pandora is ok (sirius xm is coming out with the lynx product that might create significant competition)

    IPO's just seem so choppy with zig zags all over the place. They do well initially but then gradually go down for the most part. Too dangerous to short if you ask me.

  6. bill1102inf


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    6   10:17am Sat 5 Nov 2011   Share   Quote   Permalink   Like   Dislike (1)  

    Funny you say that you entered a small short position. Your full of fucking shit and should be banned from this site permanently. No one is short groupon yet because the shares have not settled, therefore there are no shares TO short. Regardless of whether it is a good short op or not. AND ITS NOT, as only idiots short $2X.00 stocks with little float when there are much better short ops available. Stop lying and promoting stupidity would ya? Oh, and go fuck yourself you lying piece of shit.

  7. Patrick


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    7   10:44am Sat 5 Nov 2011   Share   Quote   Permalink   Like (1)   Dislike (2)   Protected  

    bill1102inf says

    Your full of fucking shit

    Hmmm, I should make it easier to use the Take It Outside link. Currently requires one person to click it and another to accept. Maybe it should be a single click operation.

  8. RealValue


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    8   12:01pm Sat 5 Nov 2011   Share   Quote   Permalink   Like   Dislike (1)  

    The difference between day traders and investors is that investors will put a short position probably 3 to 4 % of their portfolio with a thesis that the company is either a fraud or has outdated technology or bad management. A day trader will bet on the stock for superficial reasons trying to time the market without understanding the long term prospectus. Shorting stock on a whim is a gambling. Pay for detailed information about the companies valuation and speak to people in the industry, don't rely on some message board where people are speculating about the companies, unless you have a lot of money and you are willing to loose it all... You have to have deep pockets and patience to short, unless you just want to gamble.

  9. justme


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    9   2:20pm Sat 5 Nov 2011   Share   Quote   Permalink   Like (1)   Dislike (1)  

    Oops, I clicked the "Take it outside" link on Patrick's post just to see how it works. Patrick, please remove the challenge :-).

    (PAUSE)

    Hmm, I clicked it again and it toggled back to not generating a challenge? Are we good then?

  10. justme


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    10   2:29pm Sat 5 Nov 2011   Share   Quote   Permalink   Like   Dislike (1)  

    Groupon issued 30M shares at $20 for the purpose of the IPO. 30M shares of float is about 5% of all shares outstanding. Also the market cap of the currently tradable shares is about 30M*$27 or $910M. This is so low that the stock can easily be manipulated to a higher price.

    Anyone who thinks about shorting this POS should consider that an entire Wall St machine will be trying to screw you if you do so. I'm not saying shorting GRPN cannot be successful, just saying that it is very risky at the current time. The market for GRPN can stay manipulated longer than a shorter can stay solvent.

  11. Patrick


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    11   4:40pm Sat 5 Nov 2011   Share   Quote   Permalink   Like   Dislike (2)   Protected  

    justme says

    Hmm, I clicked it again and it toggled back to not generating a challenge? Are we good then?

    Takes two to argue. So if the same person clicks it, it toggls back to unchallenged.

  12. FortWayne


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    12   9:47pm Sat 5 Nov 2011   Share   Quote   Permalink   Like   Dislike (2)  

    Nomograph says

    FortWayne says

    i'm going to short it. I usually don't gamble, but this is a rare moment.

    I was going to short as well, but after reading your post I've changed my mind.

    A person could do very well in life doing the exact opposite of what you do.

    We are already opposite of each other. The biggest difference is that I try in life.

  13. Nomograph


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    13   5:28am Sun 6 Nov 2011   Share   Quote   Permalink   Like (2)   Dislike  

    FortWayne says

    The biggest difference is that I try in life.

    Actually, the biggest difference is that you fail in life.

    The reason you failed to achieve success is that you have an extremely negative attitude coupled with a victim mentality. This is why you spend so much time trying to convince complete strangers that they are going to lose their jobs and their careers. This is also why you blame the government, unions, corporations, CEOs, liberals, and pretty much everyone else for your problems.

    Some advice from Uncle Nomo: Try taking some personal responsibility in life; accept that your problems are completely of your own making and quit blaming others for everything.

    Now get back to sweeping up brake dust.

  14. thunderlips11


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    14   3:08pm Mon 2 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    This stock is on the way to the Pinks. A $15M profit now is a 15M loss.

    There is no end to their accounting gimmicks, even after promising to strengthen this "material weakness", and it no longer looks "Wildly Profitable". And stand by for yet more lawsuits. GRPN can't go to court, it would reveal too much about the company's "operations", so it'll be settlement after settlement.

    For apologetica by big brokerages to keep the dumb money in this stock, please see this Barron's article:
    http://blogs.barrons.com/techtraderdaily/2012/04/02/grpn-off-14-most-disappoint-call-says-merrill-growing-pains-says-jp-morgan/?mod=BOLBlog

    Stay tuned.

  15. drtor


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    15   6:19pm Mon 2 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    I actually was short GRPN (long puts) before this was announced. Basically my thesis is that growth looks hugely impressive year on year, but if you look quarter on quarter it is stagnating, some increase in subscribers but falling spend per subscriber. Then there is no profitability yet, and even if they go plus (they might for Q1), there is no way they can justify an evaluation greater than $10B. This was one of those rare cases where I felt a stock was more than 100% overvalued and shorted it.

    Of course I was lucky that these accounting shenanigans came to light. I guess when you are more than 100% overvalued there are a lot of things that can go wrong and start pushing your stock towards fair value...

  16. TMAC54


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    16   5:01am Tue 3 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    FortWayne says

    Nomograph says

    FortWayne says

    i'm going to short it. I usually don't gamble, but this is a rare moment.

    I was going to short as well, but after reading your post I've changed my mind.

    A person could do very well in life doing the exact opposite of what you do.

    The book "ONE" prescribes that Love & Hate is the same. FortWayne, Just be thankful that we are NOT insignificant.
    Ever been in a room full of adolescents, the conversation revolving around who has the bigger ones and that bitch has one big un and one little one. It is all to make themselves feel better about their own insecure ego. So be understanding with this guy.

  17. FortWayne


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    17   1:00pm Thu 5 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Thanks TMac,

    This was a good short, worked out well even though I did not risk much.

  18. Vicente


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    18   2:14pm Thu 5 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Damn I wish I had paid more attention this thread, missed a good short.

  19. drtor


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    19   3:43pm Thu 5 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    Vicente says

    Damn I wish I had paid more attention this thread, missed a good short.

    IMHO it is not too late, I still think they are hugely overvalued at greater than $9B market cap, and I am still short (long puts). Of course I have been wrong before.

    justme says

    The market for GRPN can stay manipulated longer than a shorter can stay solvent.

    This is always a key concern for short selling. To be sure the stock will probably flucutate a great deal in the coming weeks and months. However, if my fundamentals analysis is correct in that their growth is really slowing down, then the truth will be plain for everyone to see within one or two earnings calls. And between those earning calls the insider trading blackout window will expire.The insiders and banksters will have to run for the exits.

    I have been wrong before in my analyses, but you know what is really curious? Mgmt has given no guidance for 2012 . Zip. Nada. If their internal projections showed strong continued growth do you think they would have been shy about sharing them...? Or could there be some other reason why they don't want to give any guidance before the are allowed to sell out?

  20. FunTime


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    20   6:41pm Thu 5 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    I happened to catch this thread(I wonder how many bought back shares after NOV 28...) and figured activity today was due to this:
    http://www.prweb.com/releases/groupon-lawsuit/information/prweb9375430.htm

  21. Vicente


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    21   10:53am Tue 10 Apr 2012   Share   Quote   Permalink   Like (1)   Dislike  

    Hey I made some beer & pretzels money on GRPN puts, thanks for the tip!

  22. theoakman


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    22   6:21am Fri 13 Apr 2012   Share   Quote   Permalink   Like   Dislike  

    I haven't met a business owner that was ever happy with their groupon deal after the fact. I think the company is poorly run and even if their business model is viable, some other company will come in and make them worthless in the same fashion that facebook did to myspace.

  23. thunderlips11


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    23   1:47pm Tue 29 Oct 2013   Share   Quote   Permalink   Like   Dislike  
  24. FortWayne


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    24   7:23am Tue 5 Nov 2013   Share   Quote   Permalink   Like   Dislike  

    Going the way webvan did

  25. APOCALYPSEFUCKisShostikovitch


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    25   7:43am Tue 5 Nov 2013   Share   Quote   Permalink   Like (1)   Dislike  

    Penny stock written all over it.

    Ponzi.

    Rip its lungs out.

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