Groupon has disappointed expectations once again, driving its shares down nearly 17 per cent to an all-time low. The daily deals bazaar posted revenues for the third quarter amounting less than its own estimates and well short of Wall Street’s already quite cautious expectations, despite getting a bump from a bunch of unused …
Redundancy Notice From Groupon
Dear employee it is with regret we can no longer afford to employ you but as recognition for your service to the company please enter the following code into our website.
This will give you an amazing 17.4% off at the nearest Savlation Army soup kitchen.
Thank you for your years of servitude.
Dave couldn't give a shit as I'm still rich (CEO)
> massive reduction in headcount, down to 11,866 from 12,820 in the previous quarter
That's not even decimation! Massive means something like one third, not one thirteenth. Just for a moment you had my hopes up so high too.
Unless you meant "down BY 11,866" - that would be an early Xmas pressie (I bear no ill-will for any particular staffer but I'll be happy to see the whole company founder. Especially its founders!)
First of many
one thing the internet has facilitated is people who dont actually DO anything. Just parasitically sponge of those that do. Have noticed quite a few "meal to go" type sites which just aggregate local takeaways/deliverys - they take your order, pass it on, and keep a cut. All very well, but they have no control over the quality of what gets delivered - they're willing to take money, but not responsibility.
Re: First of many
"one thing the internet has facilitated is people who dont actually DO anything... willing to take money, but not responsibility"
Indeed. This is proving, for some global corporates, to be quite a lucrative business model.
Re: First of many
Blame Ticketbastard- they started it.
12,000 employees??? What on earth do they all do? They could teach the Civil Service a lesson in waste...
I was going to post the same thing (sans civil servant joke). Knowing what Groupon does (or doesn't, as the case may be) I had them pegged for having a few hundred people, maybe. What the hell, eleven thousand? Do they write the coupons by hand?
Sometimes I feel bad when a company heads towards failure…
Sometimes I don't.
This type of business model seems like a good idea when you first look at it, but is doomed to failure. There is simply no value added in anything they do. They are basically telling retailers that they have a shit direct relationship with their customer. Isn't it easier/cheaper in the long run for the retailer to improve their direct relationship?
with all voucher based companies the real money is on non redemption (that is vouchers that are purchased but then never used).
if a voucher is used then a company might expect a profit margin of around 10%, obviously if a voucher is not used then the profit margin is 100%.
while this may sound like common sense you may be surprised at the levels this can reach, most voucher based companies assume a rough figure of 25% non redemption and it's this 25% that companies like groupon thrive on, since they take the money for the voucher and hold on to it and then only pay out if the customer uses the voucher with the supplying company.
(anonymous because of work)
I agree, our average was around 30% with some voucher companies (who actually do pay us the full amount (less commission for unclaimed vouchers) unlike Groupon).
It is these non-claimers (on voucher sales) who make an offer profitable for the business using the likes of Groupon - However in the last 12 months we have seen our unclaimed vouchers drop to 5-10% with voucher companies - this means we have had to firm up our pricing based on this.
I think this is mainly due to money being tighter with consumers and that vouchers sales are now a recognised way of getting a good deal for the consumer(not necessarily a lazy present buy alternative!) , so the decision to use the offer is fully made before the buy transaction is initiated. After all you wouldn't buy a microwave in a shop only to leave it on the counter.
Not totally true, we use a lot of these type of outfits successfully - Its only Groupon that hold the money on non-redeemed vouchers
Others - Amazon Local for example - pay on all sales - and pay promptly
I knopw peoples jobs are involved (and a few have my sympathy) but
the words of Mr. Creedy spring to mind:
Die! Die! Why won't you die?... Why won't you die?
Anonymous for obvious reasons!
Yes, I dislike Groupon!
I'm amazed anyone bought this
Other web 2.0 stocks look overvalued because of the mindless herd, but their business model is plausible.
Facebook and Linkedin are overpriced, but they're otherwise sensible businesses.
Groupon was a scam from beginning to end. There's no sustainable business model and so they're not a going concern. That means any p/e ratio above 2 or 3 is overvaluing them (let alone a billion dollar valuation when they're making a loss).
Any of the potential investors for whom that was too complicated should at least have done a little research into publically available concerns about Groupon's major shareholder:
I have some sympathy for non-tech people who invested in Facebook (not too much, but some) but anyone who put their money into Groupon was essentially putting their money into a pyramid scheme with publically available information to show it was a pyramid scheme and a clear indication that the IPO was the break point at which the important people would stop trying to pretend it was a business.