Technology StocksGroupon, Inc.

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

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To: Glenn Petersen who wrote (205)12/9/2011 4:53:11 PM
From: stockman_scott
1 Recommendation   of 462

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

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To: Glenn Petersen who wrote (205)12/9/2011 9:18:13 PM
From: stockman_scott
1 Recommendation   of 462
When To Short Groupon

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To: Glenn Petersen who wrote (205)12/14/2011 3:40:45 PM
From: stockman_scott
   of 462
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, 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 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
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William Blair Analysts Now Covering Groupon (GRPN) Stock

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
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Groupon Really Wants To Build Its Own Data Center, But Can't Afford It

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
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Ahead of I.P.O., S.E.C. Pressed Groupon On Accounting

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.

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

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To: Glenn Petersen who wrote (214)1/3/2012 3:38:31 PM
From: stockman_scott
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Groupon Shares Fall on Merchant Concerns

January 3rd, 2012 - (Reuters) - Groupon Inc shares fell more than 7 percent on Tuesday on concern the company may not have as many daily deals to offer as some merchants pull back. Susquehanna Financial Group and daily deal industry tracking firm Yipit surveyed almost 400 merchants recently about their experiences running daily deals with Groupon, LivingSocial and other providers.

An average of 8 out of 10 merchants enjoyed working with daily deal companies, the survey found.

However, it also found that 52 percent of the surveyed merchants are currently not planning to feature deals in the next six months. Nearly 24 percent of the merchants intend to feature only one deal in the next six months, the poll also found.

Groupon shares were down 7.4 percent at $19.10 during afternoon trading on Tuesday, below the company’s initial public offering price of $20.

Last year, Groupon completed one of the largest Internet IPOs since Google’s debut, but the Chicago-based company’s business model has been questioned by some analysts.

A crucial part of the company’s business involves persuading merchants to run deals and accept the large discounts that are integral to the offers.

“Our proprietary merchant survey highlights concerns of the daily deal sites and early read implies lower usage over the next six months, despite some surprisingly high satisfaction rates,” Herman Leung, an analyst at Susquehanna, wrote in a research note detailing the survey results.

Groupon and LivingSocial recently unveiled instant deals, which are location-based offers that are usually run by merchants for a few hours only.

The survey by Susquehanna and Yipit found that only 10 percent of merchants polled have considered running an instant deal with Groupon or LivingSocial.

(Reporting by Alistair Barr, editing by Dave Zimmerman)

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To: stockman_scott who wrote (216)1/12/2012 3:35:29 PM
From: Glenn Petersen
1 Recommendation   of 462
Andrew Mason will be on "60 Minutes" this week:

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