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To: Glenn Petersen who wrote (205)12/1/2011 10:59:07 AM
From: stockman_scott
1 Recommendation   of 426
 
Groupon fourth quarter off to strong start:

http://www.reuters.com/article/2011/12/01/us-groupon-yipit-idUSTRE7B00RM20111201

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To: Glenn Petersen who wrote (205)12/8/2011 4:18:23 AM
From: stockman_scott
   of 426
 
LivingSocial Is Said to Get Funding Valuing It at $6 Billion

bloomberg.com

Dec 7, 2011 6:12 PM CT

LivingSocial.com, the online-coupon provider that competes with Groupon Inc., lined up $400 million in funding that gives it a valuation of about $6 billion, according to a person with direct knowledge of the matter.

The company has already sold $176 million of the total, Washington-based LivingSocial said in a filing with the U.S. Securities and Exchange Commission. The funding will be a mix of equity and debt, said the person, who declined to be identified because the figure hasn’t been disclosed. The investment will come from both existing and new backers, the person said.

LivingSocial, which was in talks with banks earlier this year about raising $1 billion in an initial public offering, shifted plans after other Internet companies faced turbulent debuts in the public markets. Groupon, which has a market capitalization of $13.6 billion, has seen its shares dip as much as 24 percent below its IPO price last month. The stock is now trading at 5.8 percent more than its initial price.

As LivingSocial grows and expands into new cities, it requires funds to hire and train more salespeople, said A.B. Mendez, a social-media analyst at WJB Capital in New York.

“LivingSocial has made the claim that they have a human sales representative on the ground in every city where they have a daily-deal presence,” Mendez said. “In theory, LivingSocial’s model is as human-capital intensive, if not more, than Groupon.”

Fueling Expansion

Executives and backers have discussed a round of funding valuing the company at $6 billion since September. LivingSocial plans to use the new investment to fuel operations and expansion, said the person familiar with the matter.

The company has almost doubled in value since April, when it raised $400 million at a valuation of $3.5 billion, two people with knowledge of the matter said at the time. With the $400 million in funding unveiled today, LivingSocial has received a total of $1.03 billion from investors, including Grotech Ventures, Institutional Venture Partners, T. Rowe Price Group Inc. and e-commerce site Amazon.com Inc. (AMZN)

LivingSocial delivers daily discounts on restaurants, hotels, events, and other goods and services. The daily-deal market may generate $4.17 billion in U.S. sales in 2015, compared with $1.97 billion this year, according to research firm BIA/Kelsey in Chantilly, Virginia.

U.S. consumers will spend $80 million to $100 million on daily-deal gifts between Thanksgiving and Christmas, estimates Yipit, a website that aggregates offers from a range of companies. That amount is up from $15 million to $20 million during the same period a year ago, Yipit said.

Other technology companies are pushing ahead with their IPOs, even if valuations are coming down. Zynga Inc., which earlier expected to be valued at as much as $10 billion in its IPO, now aims to sell shares at a valuation of up to $7 billion.

To contact the reporter on this story: Douglas MacMillan in San Francisco at dmacmillan3@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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To: Glenn Petersen who wrote (205)12/9/2011 2:30:58 PM
From: stockman_scott
   of 426
 
Owner of Drew’s Eatery on Groupon Deal: ‘It Was a Bad Choice’

centersquarejournal.com

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To: Glenn Petersen who wrote (205)12/9/2011 4:53:11 PM
From: stockman_scott
1 Recommendation   of 426
 

Groupon's Stock Is Up 55% From Its Low Point, And No One Is Talking About It

businessinsider.com

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To: Glenn Petersen who wrote (205)12/9/2011 9:18:13 PM
From: stockman_scott
1 Recommendation   of 426
 
When To Short Groupon

seekingalpha.com

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To: Glenn Petersen who wrote (205)12/14/2011 3:40:45 PM
From: stockman_scott
   of 426
 
Groupon Down on Bearish Underwriters
__________________________________________________________

December 14, 2011 -- (Reuters) -- Groupon Inc shares dropped on Wednesday after the top underwriter on the company’s recent initial public offering started research coverage with a luke-warm report.

Analysts at Morgan Stanley came out with an “equal-weight” rating on the stock and cited “fierce competition” in the daily deal industry, which Groupon leads.

As if to hammer home that point, eBay Inc’s PayPal unit unveiled plans on Wednesday to start offering coupons to its more than 100 million users via smartphones and other mobile devices.

The move stems from eBay’s April acquisition of Where.com, a location-based mobile advertising and services company.

“Groupon participates in a highly competitive business,” Morgan Stanley analysts, led by Scott Devitt, wrote in the “Investment Risks” section of their initiation note on Groupon. “Competitors may not be as motivated by near-term profitability, and subsidize deals or offer merchants more favorable terms.”

Research analysts at IPO underwriters are typically upbeat when they start covering companies that have been important clients. Thus a neutral rating is noteworthy.

Groupon shares dropped 4.5 percent to $22.28 in afternoon trading on Wednesday. Groupon went public in November at $20. The shares slumped below the IPO price in late November but have rebounded recently.

Morgan Stanley analysts said Groupon has several advantages, including a huge salesforce, many merchant relationships, a massive subscriber base and valuable data that comes with that.

However, they also said a Groupon share price over $23, where it stood earlier this week, means investors should wait for a better entry point before buying the stock.

Goldman Sachs, the other lead underwriter on the Groupon IPO, started coverage on the company on Wednesday with a “buy” rating, saying Groupon has the key to unlocking the massive local advertising market on the Internet.

“The size of the addressable market, new business models like Groupon Now! in mobile, and the advantages of scale more than offset the considerable risks from competition, margin pressure, and deal fatigue,” Goldman Sachs analysts said in their note.

Several other brokerages initiated coverage of Groupon, more than a month after it raised $700 million in one of this year’s most closely watched IPOs.

RBC Capital Markets started Groupon with a “sector perform” rating, saying it sees few companies that have the open-ended growth opportunity that Groupon has.

But Citigroup said the success in new segments — Groupon Now, Groupon Rewards, Getaways, Live, Goods — could take significant time to prove out, and it started the company with a “neutral” rating.

Citigroup said Groupon’s current valuation is at a slight premium to its Internet peers such as Amazon.com Inc, Netflix Inc and LinkedIn Corp.

JPMorgan started Groupon with “neutral” and said it expects Groupon’s revenue growth in 2012-13 to slow from current levels as the company slows new subscriber acquisition in the United States and its maturing international markets.

“One of the key investor debates around Groupon has been whether the company can continue to grow revenue despite slowing subscriber growth and potential concerns around sustainability of subscriber conversion rates,” JPMorgan analyst Doug Anmuth wrote in a note.

(Reporting by Alistair Barr in San Francisco and Ashutosh Pandey in Bangalore; Editing by Supriya Kurane and John Wallace)

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To: Glenn Petersen who wrote (205)12/14/2011 4:03:01 PM
From: stockman_scott
   of 426
 
William Blair Analysts Now Covering Groupon (GRPN) Stock

localizedusa.com

Equities research analysts at William Blair initiated coverage on shares of Groupon (NASDAQ: GRPN) in a research note issued to investors on Wednesday. They set an “outperform” rating on the stock.

Separately, analysts at Credit Suisse (NYSE: CS) initiated coverage on shares of Groupon in a research note to investors on Wednesday. They set a “neutral” rating on the stock. Analysts at Wells Fargo & Co. (NYSE: WFC) initiated coverage on shares of Groupon in a research note to investors on Wednesday. They set an “outperform” rating on the stock. Also, analysts at Barclays Capital (NYSE: BCS) initiated coverage on shares of Groupon in a research note to investors on Wednesday. They set an “overweight” rating on the stock.

Savvy consumers get their coupon on with Groupon. Tapping into the power of collective buying, the company helps businesses attract customers by offering them a unique way to save on things to eat, see, and do in more than 500 markets worldwide. In each participating city, Groupon advertises a daily deal, typically a half-off coupon for anything from a local restaurant or retail store to a hotel or spa; if enough consumers buy the coupon online by midnight, the deal is on and the featured business can achieve a nice chunk in sales. In late 2010, the company rejected a reported $5.3 billion buyout offer from Internet search giant Google. Groupon instead filed to go public in mid-2011.

Shares of Groupon traded down 8.23% during mid-day trading on Wednesday, hitting $21.40. Groupon has a 52 week low of $14.85 and a 52 week high of $31.14. The stock’s 50-day moving average is $21.76 and its 200-day moving average is $21.76. The company has a market cap of $13.65 billion.

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To: Glenn Petersen who wrote (205)12/20/2011 5:58:33 PM
From: stockman_scott
1 Recommendation   of 426
 
Groupon Really Wants To Build Its Own Data Center, But Can't Afford It

businessinsider.com


12/19/11 -- Before its IPO, Groupon promised investors that it was going spend more money on data centers.

But its cash flow is brutally tight. Even with the $700 million it raised in its IPO, it doesn't have the cash to build its own data center, says BetaBeat.

The company had $243.9 million in cash and equivalents when September closed, according to the Motley Fool. But it owed merchants $465.6 million.

Building a new state-of-the-art data center could cost as much as $750 million with another $10 million a year needed in upkeep. At least that's how much Apple was said to be spending on its North Carolina facility for the iCloud.

Groupon doesn't necessarily need to build its own data centers to grow -- it has so far mostly rented space from hosting providers and cloud providers like Amazon, like most other fast-growing Internet startups.

Facebook, for instance, just started building its own data centers last year, despite having more than 800 million users, many of whom are uploading photos and videos and sharing content, which requires massive amounts of file storage.

But Groupon is starting to think about it. Whereas the company was famous for growing by renting nearly everything it needed from the cloud, it has started to build its own IT systems from scratch. For instance, It has its own homegrown systems for tracking deals that are analyzed for trends, says ZDnet.

Plus, investing in technology -- particularly data centers -- is one of the areas Groupon promised investors in its IPO prospectus:

We have spent and expect to continue to spend substantial amounts on data centers and equipment and related network infrastructure to handle the traffic on our websites and applications. The operation of these systems is expensive and complex and could result in operational failures. In the event that our subscriber base or the amount of traffic on our websites and applications grows more quickly than anticipated, we may be required to incur significant additional costs.

But does it have the cash it needs to cover "significant additional costs"? Answer for now seems to be, "no."

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To: stockman_scott who wrote (213)12/28/2011 8:54:16 PM
From: Glenn Petersen
1 Recommendation   of 426
 
Ahead of I.P.O., S.E.C. Pressed Groupon On Accounting

By EVELYN M. RUSLI
DealBook
New York Times
December 28, 2011, 7:05 pm

Ahead of Groupon‘s highly anticipated initial public offering in November, the Securities and Exchange Commission repeatedly pressed the daily deals giant to defend its business model and its accounting measures, according to comment letters recently disclosed.

The letters, sent by the S.E.C. between June 29 and October 3, provide an interesting window into the back-and-forth discussions between the Internet company and its regulators in the months leading up to its I.P.O. In the letters, the S.E.C. seemed somewhat skeptical of Groupon’s business model and called on the company to balance its bullish statements with additional disclosures. Regulators also asked Groupon to address comments made by executives during the so-called quiet period, which seemed to defy S.E.C. rules.

Shares of Groupon slipped nearly 2 percent on Wednesday to close at $22.62 per share.

In the first letter, dated June 29, the S.E.C. outlines 73 comments, spanning 14 pages. Among the comments, regulators called on Groupon to list specific risk factors for its international operations, provide additional data on consumer attrition and repeat merchants, and to temper certain statements about the company’s growth prospects. In one section, for instance, the regulators advise the company to re-frame a comment made by chief executive Andrew Mason that “‘Groupon is better positioned that any company in history to reshape local commerce’ by noting the company’s net losses and competitive landscape.”

In response to another statement made by Mr. Mason, that “our customers and merchants are all we care about.” The regulators reminded Groupon of its responsibility to its investors:

“Please balance the statements regarding the premise that your customers and merchants are all you care about with a discussion of your fiduciary duty to shareholders.”

As evident in the letters, the S.E.C. spent a lot of time parsing the statements of Groupon’s executives on and off the prospectus. In its first comment letter, regulators called on the company to address a Bloomberg News interview, during which co-founder Eric Lefkofsky said the not-yet-profitable Groupon was going to be “wildly profitable.” Several months later, the S.E.C. also asked the company to provide the full text of an internal e-mail sent by Mr. Mason, which was somehow leaked to the press.

Notably, the S.E.C. was particularly clear about its reservations on Acsoi, or adjusted consolidated segment operating income, an uncommon financial yardstick Groupon introduced in its first filing. In the June 29 letter, the S.E.C. said Acsoi — which is essentially operating profit stripped of marketing and acquisition costs — was somewhat misleading to prospective investors:

It appears that online marketing expense is a normal, recurring operating cash expenditure of the company. Your removal of this item from your results of operations creates a non-GAAP measure that is potentially misleading to readers. Please revise your non-GAAP measure accordingly.

The exchange between the S.E.C and Groupon, reveal the company’s initial resistance. In a July 14 letter to the S.E.C., the company tried to defend its math, arguing that Acsoi does include some expenses related to marketing for existing subscribers. The S.E.C. was not swayed, and in a subsequent letter, simply asked for its removal. On October 10, Groupon complied in a revised filing.

dealbook.nytimes.com

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To: Glenn Petersen who wrote (214)12/29/2011 4:21:24 PM
From: stockman_scott
1 Recommendation   of 426
 
Groupon Acquires Stealth Silicon Valley Startup Campfire Labs

techcrunch.com

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