Technology StocksGroupon, Inc.

Previous 10 Next 10 
To: stockman_scott who wrote (216)2/1/2012 7:25:59 PM
From: Glenn Petersen
2 Recommendations   of 462
Amazon filing shows $558M loss for LivingSocial in 2011

by Todd Bishop
February 1, 2012 at 8:31 am

How much does it cost to bulk up and compete with the likes of Groupon in the daily deals market?’s annual Form 10-K filing, made public this morning, reveals detailed financial information about LivingSocial, the privately-held Washington, D.C.-based company in which Amazon is an investor.
A footnote in Amazon’s filing gives this condensed statement of operations for LivingSocial in 2011.

  • Revenue: $245 million
  • Operating expense: $686 million
  • Other expense: $117 million
  • Net Loss: $558 million
We were able to track down some additional context: A person familiar with LivingSocial says the revenue would have been significantly higher had it included the company’s full international results for the year, which were boosted in part by a series of overseas acquisitions. In addition, the bottom line was impacted by heavy marketing expenses, as the company sought to grab market share, and those expenses were concentrated heavily at the beginning of last year.

The losses also reflect non-cash items such as stock compensation for employees, as the company grew from 600 employees to 5,000 over the course of the year, and expanded from three international markets to 20. Here’s the Living Social balance sheet as of Dec. 31, as shown in the Amazon filing.

  • Current assets: $156 million
  • Noncurrent assets: $285 million
  • Current liabilities: $225 million
  • Noncurrent liabilities: $21 million
  • Mandatorily redeemable stock: $199 million
Amazon, which originally invested $175 million in LivingSocial in 2010, says the book value of its 31 percent interest in the company was $208 million as of Dec. 31. That was up from a $192 million book value as of Sept. 30, when Amazon put its stake at 32 percent.

Amazon was reportedly among the investors in a follow-on financing round in LivingSocial in December, allowing the daily deals company to hold off on an IPO for the time being.

Groupon, which went public last year, also continues to operate in the red.

Share RecommendKeepReplyMark as Last Read

To: stockman_scott who wrote (216)2/7/2012 2:47:56 PM
From: Glenn Petersen
1 Recommendation   of 462
GRPN reports tomorrow. A preview:

Groupon’s Made-Up Holiday to Play Role in First Earnings Report

By David Benoit
W3all Street Journal
February 7, 2012, 1:52 PM

Groupon, one of last year’s most-talked about IPOs, will deliver its first earnings report tomorrow.

The daily-deals company is expected to report a 3 cent per share profit on revenue of $475 million, according to Thomson Reuters. (It is the first time the company has released the data at the end of the quarter, though it did disclose financial data in its pre-IPO filings.)

The stock rallied 15% this year to $23.78 recently, but remains below its highs of over $31 the day it priced, amid concerns about dramatically increased competition.

Here’s what else analysts say to look out for tomorrow.

Citi examines surge in gross billings: Citi analysts predict $1.31 billion in gross billings, tripled the prior year, but slowed dramatically from the quintupling Groupon had been experiencing. Showing the same growth patterns (massive by all accounts except Groupon’s own high bar), Citi believes active customers are Groupon are likely at 31 million, 3.5 times where they were a year earlier.

Raymond James will look for any signs of customer fatigue: Given the slowing growth rates, it matters more if Groupon’s customers are actually buying any Groupons. Raymond James says investors will be focused on consumer engagement metrics, including Groupons sold per active customer.

Morgan Stanley expecting a beat on Groupon’s made up holiday: Morgan Stanley believes Groupon can beat sales expectations, partly thanks to “Grouponicus,” Groupon’s somewhat creepy and made-up commercial holiday that it bases on a legend of Groupo the Deal Bird who travels throughout history bestowing deals upon the people. Outside of that, Morgan Stanley is looking for clarity on what exacting Groupon will report each quarter.

Susquehanna focuses on commissions: The analysts will be watching how much of each sale Groupon is collecting –the take rate. They are also expecting a first-quarter outlook for better top and bottom lines.

Share RecommendKeepReplyMark as Last Read

To: stockman_scott who wrote (215)2/8/2012 5:46:03 PM
From: Glenn Petersen
1 Recommendation   of 462
GRPN disappoints.

The press release:

Groupon Posts Quarterly Loss

New York Times
February 8, 2012, 5:00 pm

narrowed its fourth-quarter loss to $9.8 million on an adjusted basis, as the online coupon giant sought to demonstrate its continued growth in its first earnings release as a public company.

The loss, which amounts to 2 cents a share, is down sharply from the $185 million loss for the quarter a year ago. The company cited an unusually high tax rate for some of its overseas operations.

The pro-forma figures exclude certain accounting charges, like stock-based compensation. On a generally accepted accounting principles basis, Groupon lost $42.7 million for the quarter.

In other metrics, however, Groupon showed some improvement. Its revenue for the quarter leaped to $506.5 million, up 194 percent from the same time a year ago. The average analyst estimate for quarterly revenues was $475 million, according to Thomson Reuters.

The company also said that it turned an operating profit, of $15 million, for the first time in nearly two years.

From the time Groupon first sought to go public, its story has been built on enormous growth, as it raced to acquire a daunting customer base. The company now claims 33 million active users — those who have purchased at least one deal over the past year — worldwide, up more than 20 percent.

Yet its revenue guidance for the first quarter of this year is highly conservative, expecting just $510 million to $550 million. And while the company has continued to trim its marketing expenses over the past year, to $256,000, its non-marketing costs climbed to $247.4 million.

“This quarter’s results show that our model is just starting to demonstrate leverage – and that Groupon is the clear leader in our space.” said Jason Child, Groupon’s chief financial officer.

Groupon shares fell 6 percent in after-hours trading, to $23.10.

Share RecommendKeepReplyMark as Last ReadRead Replies (1)

To: Glenn Petersen who wrote (222)2/8/2012 6:23:39 PM
From: Sri.1729
1 Recommendation   of 462
Now trading at $20.65. On a personal note, I believe, we will have to wait and watch before we conclude a valuation for GRPN. A $15-$17 is in my opinion a good valuation at the moment. What are your thoughts?


Share RecommendKeepReplyMark as Last ReadRead Replies (1)

To: Sri.1729 who wrote (223)2/9/2012 1:37:43 PM
From: Glenn Petersen
   of 462
Your valuation is reasonable. The stock should probably be trading in the low teens until they achieve profitability. It will be interesting to see what happens when the lockups expire.

Share RecommendKeepReplyMark as Last Read

To: stockman_scott who wrote (216)2/17/2012 7:18:02 PM
From: Glenn Petersen
1 Recommendation   of 462
GRPN makes a strategic acquisition:

Groupon Acquires NYC-Based Startup Hyperpublic

Jason Kincaid
February 16, 2012

Groupon has just acquired Hyperpublic, a NYC-based startup that’s spent the last two years building technology related to geo-location and the layers of information — like deals and events — that live on top of it.

Terms of the deal are not being disclosed, but CEO Jordan Cooper describes it as a “huge win for our team and our investors”. He adds that Groupon was after Hyperpublic’s technology — this isn’t a case of it acquiring the team alone.

Cooper, who is also a General Partner at Lerer Ventures, says that a portion of Hyperpublic’s team will be moving out to Groupon’s engineering offices in California, while others will be leaving the company to pursue other ventures post-acquisition. Cooper will continue in his role at Lerer, and he’ll also be assuming a role with Groupon (he says he can’t get into specifics, but that he’ll be spending a lot of time in California as well).

The startup’s developer platform is going to be shut down, with maintenance and support continuing through March 2 2012 — all data will be deleted after that. Developers can find a FAQ on transitioning their data here.

The startup was founded in 2010 by Cooper and Doug Petkanics, who leads the company’s engineering team and helped forge what Cooper describes as a very engineering-focused environment. Hyperpublic raised $1.5 million in 2010 — Cooper says that board members Jordan Levy (Softbank Capital) Ken Lerer (Lerer Ventures) were also instrumental in the company’s development.

Finally, Cooper points out that Hyperpublic — which has more APIs than it does user-facing services — is a decidedly tech-heavy company. Which breaks with the stereotype of NYC startups being more focused on social platforms and media than on building ‘hard’ technology (incidentally, I suspect this stereotype will fade in the next year or so as the NYC tech community continues to grow).

Share RecommendKeepReplyMark as Last Read

To: stockman_scott who wrote (216)2/23/2012 4:36:09 PM
From: Glenn Petersen
1 Recommendation   of 462
May Day Looms Large For Groupon

Wall Street Journal
December 28,2011

A summer of IPO love risks turning into a winter of shareholder discontent.

Some initially popular initial public offerings from May and June have disappointed. Now, expirations of lockup periods could prove a stumbling block to their recovery. Many of these companies limited their initial share sales in order to support the offering price. The problematic flip side is a relatively large chunk of shares potentially hitting the market now.

Lockups typically expire 180 days after the IPO. The latest example is vacation-rental company HomeAway. It sold nine million shares, or 11% of those outstanding, in its June IPO. Its lockup period expired Monday, when another 18 million shares became eligible for sale. The remaining 54 million shares can be sold starting in February.

True, HomeAway's stock popped 11% on Tuesday, although that could prove a fleeting technical fillip. A high proportion of the free float has been borrowed by short sellers, who may be buying stock to recognize gains after shares fell 42% the prior two months. The stock remains 19% below its initial price.

Much-hyped LinkedIn's shares have fallen 11% since its lockup ended in late November. The potential float roughly doubled to 18 million shares, about a fifth of those outstanding. And 56 million more shares should be eligible for sale starting in February when an extended lockup agreement expires.

Meanwhile, Pandora Media saw its potential float increase by a factor of nearly nine earlier this month when its lockup expired. Shares haven't reacted much, perhaps because they've already fallen nearly 40% below their IPO price.

Looking ahead, Groupon and Zynga shareholders have lockups expiring on May 1 and May 28, respectively. Shareholders, already suffering lackluster performance, will have to mark their calendars.

Write to Rolfe Winkler at

Share RecommendKeepReplyMark as Last Read

To: stockman_scott who wrote (216)3/8/2012 9:30:34 AM
From: Glenn Petersen
1 Recommendation   of 462
Some good news for GRPN:

Daily deals inspiring repeat business, study finds

By Jennifer Van Grove
March 5, 2012 2:09 PM

Daily deal providers such as Groupon and LivingSocial are often criticized for driving low-quality business to merchants, but these young companies may, in fact, be purveyors of loyal customers.

Ninety-one percent of web shoppers who redeemed a deal said they have gone on to — or plan to go on to — buy again with the merchant in question, according to customer experience analytics firm ForeSee.

ForSee fielded an online survey between November and December 2011 as a follow-up to its spring 2011 study. The study, which includes survey responses from nearly 10,000 visitors to top retail websites, found that deal buyers are far more likely than expected to turn into repeat customers — a mere 3 percent said they don’t plan to make a repeat purchase from the merchant deal provider.

The findings should come as good news for the newly public Groupon, which continues to face criticism around its business model.

Groupon, according to ForeSee’s data, is also showing a slight upward trend in its purchase rate. Fifty percent of respondents said they purchased an offer from Groupon in the previous 90 days, a 3 percent bump from spring 2011. The deals juggernaut also has the largest share of subscribers who exclusively subscribe to deals from Groupon. Forty-four percent of Groupon subscribers only use Groupon services, while just 12 percent of LivingSocial subscribers are exclusive to its site.

The ForeSee study did uncover one troubling tidbit for the entire industry: daily deals subscriptions are down. The research company found that 60 percent of visitors to top retail websites enrolled in at least one daily deal email program during the holiday season, which represents a five percent dip in subscribers from the spring.

Photo credit: Groupon/Flickr

Share RecommendKeepReplyMark as Last Read

To: stockman_scott who wrote (216)3/11/2012 11:12:22 AM
From: Glenn Petersen
1 Recommendation   of 462
When Today’s Deal Is Tomorrow’s Regret

New York Times
March 9, 2012

HOW much is a $150 coupon worth? For Matt Sumell, the cost turned out to be one new relationship, as well as a little bit of pride.

In January 2011, Mr. Sumell bought a $150 coupon for a romantic overnight stay in a hotel from LivingSocial, the daily deal site (a savings of about 50 percent). He planned to use it with a woman he had been dating for five years, until that relationship ended.

But Mr. Sumell, an English teacher and fiction writer from Los Angeles, is not one to throw away money. So 11 months later, with the coupon unused and an expiration date looming, he set aside his better judgment and invited a woman he had been dating for only a month.

“I said to her, ‘Come with me, we’ll take a ride,’ ” Mr. Sumell recalled. “ ‘It’ll be great.’ ”

It was not great.

“The hotel was directly across the street from a Hooters,” he said, “and it was bikers’ week,” meaning the hotel was overrun with growling motorcycles and middle-aged men wearing leather. Ambience aside, the sleepover seemed rushed and uncomfortable. “The whole thing was just really awkward,” he said.

So it goes for those people who lately find their leisure activities dictated less by their own free will than by the opt-in domination of daily deal sites. While the rapid spread of services like Groupon, LivingSocial and Amazon Local has allowed millions to try restaurants or leisure activities they otherwise couldn’t afford (or wouldn’t have known about), it is also compelling some people to spend time doing things they don’t necessarily want to do.

For some, it’s eating dinner in a restaurant they already know they don’t like. For others, it’s taking classes that promise “You can learn to salsa” despite a lifetime of evidence to the contrary.

For Karen Eddinger, a real estate agent in Seattle, it meant signing up for a local cooking class even though she hates cooking almost as much as she hates taking classes.

“I really don’t know why I bought it,” she said.

She also recently made her grandson visit the Seattle Children’s Museum for the second time since October not because he liked it, but because she and her ex-husband had unknowingly bought the same Groupon deal. Her daughter and son-in-law have lately attended a number of yoga classes, massages and bad restaurants in an effort to use up their mother’s coupons. (For those without family members willing to help, a secondary market for digital coupons has emerged. Sites like DealsGoRound and CoupRecoup let people sell their unwanted coupons at a discount.)

Coupons are nothing new, and shoppers have long made poor decisions in pursuit of saving pennies. But daily deal sites have raised the stakes in convenience (they arrive via e-mail and are bought with a click), savings (half-off deals to upscale establishments are common) and experiences (Want to hang glide? There’s a Groupon for that).

Hence a new generation is discovering the hidden downsides of couponing. “A deal sometimes feels like a really wonderful thing, like you’ve outsmarted the system and have something special,” said Dan Ariely, the author of “Predictably Irrational,” a book about how a skewed perception of economics can result in poor decisions. “Because of that, you have an extra sense of accomplishment, which you are willing to pay for in terms of time and money.”

But that perspective can mean a bid to save money can quickly devolve into a boondoggle. Lindsay Hall Harrison, a lawyer from Orlando, Fla., bought a $6 Groupon for $12 worth of ice cream from a shop near a beach that she and her husband had visited a couple of times. The problem: the beach was an hour and a half away, and the Harrisons weren’t always in the mood for ice cream by the time they drove there.

“We started making deliberate trips down there just to use up this Groupon,” she said. “It was the principle of the thing.” In the end, she estimated that the couple burned through two to three tanks of gasoline to claim $12 in ice cream, which, she noted, was not particularly great.

Jamie Roo, a marketing director from the Upper West Side, last year found herself eating in a nearby restaurant that she and her husband had long ago decided they didn’t like, because she couldn’t resist a deal from Amazon Local.

“We somehow persuaded ourselves to go back,” she said. Not surprisingly, the deal did not make the food taste any better. “The moral of the story is, don’t go just because it’s a deal.”

The idea that all of one’s leisure-time decisions can be outsourced to daily deal sites is encouraged by the sites themselves. In 2010, Groupon recruited Josh Stevens, a former Census worker from Chicago, to live on nothing but its own deals for a year. The company called Mr. Stevens the Groupawn. Mr. Stevens’s real-life counterparts can be found in Kimberly and Stephen Kuhn, who recently moved to Trinity, Fla., from Miami. Before the move, Ms. Kuhn was a self-described LivingSocial “near-addict,” who would use up to a dozen coupons a week, not to save money, but to decide where to eat.

“In Miami, there are all these great mom-and-pop places you would never know about because they don’t have money to advertise,” said Ms. Kuhn, who gives credit to her local LivingSocial representative (whom she has met) for having her finger on the pulse of the city.

The Kuhns set a one-day record for themselves in June when they realized they had a backlog of coupons to use before they left Miami. “My husband took the day off work and we used seven deals in one day,” all for restaurants, Ms. Kuhn said. “We started at the very tip of north Broward County and worked our way all the way down to South Beach. It was a really great way to say goodbye to the area.”

Thus far, Ms. Kuhn said, she is disappointed with the quality of the deals in Trinity, which tend to feature chain restaurants.

“It’s funny, because I never considered myself a deal addict,” she said. “I’m not a couponer, I don’t do Sunday sales. We really just used it as a tour guide, so we are missing it for sure.”

But that hasn’t stopped her from buying the deals she likes, even if they require some travel. “My husband still works out of Fort Lauderdale, so we still buy those LivingSocials,” she said. “We’ll go back.”

Share RecommendKeepReplyMark as Last Read

To: stockman_scott who wrote (216)3/15/2012 7:02:00 AM
From: Glenn Petersen
2 Recommendations   of 462
Competition from a very savvy source:

A Groupon Alternative Aims to Offer Small Businesses a Better Deal

New York Times
March 14, 2012

Constant Contact has been one of the big success stories when it comes to online companies that specialize in serving small businesses. Some half a million of them count on the company’s Web-based help in building, managing and creating marketing campaigns around customer e-mail lists.

Started 14 years ago, the company, which is based in Waltham, Mass., went public in 2007 and has expanded into other areas, including managing social-network marketing campaigns. In February, it introduced yet another service: coupon-based deal marketing. That brings Constant Contact into a crowded field of competition along with Groupon and LivingSocial. In a recent interview, condensed below, Gail F. Goodman, Constant Contact’s chief executive, explained why she thinks small businesses will prefer her company’s service.

Q. A lot of consumers are already burned out on deals. Are you too late?

A. We think of SaveLocal as building on the consumer experience that the daily deal companies have demonstrated. Their model has been about large-scale consumer lists, but we saw a while ago that it wasn’t perfectly serving our customer base of small businesses, 70 percent of which have fewer than 10 employees. We started talking to our customers about what did and didn’t work for them with Groupon and LivingSocial. We knew there had to be a better way, but it took us until the beginning of last summer to come up with what we thought would be a twist on the model that would make coupons work.

Then we spent six months developing and testing it to make sure we had it right. We think the timing is actually pretty good, because the merchant community has had a chance to become aware of the issues and problems with the daily deal market, and they’ve become very open-minded to the idea of structuring deals in a different way.

Q. What’s different about your model?

A. If Groupon provides quantity, we want to provide quality. We think the way to find your next great customer is through your existing customers, rather than through a big list of consumers who don’t know much about you. SaveLocal is about sending coupons to your current customer base, and providing them with an incentive to share the coupons with their social network in order to bring in new customers. We also turn the economics of the deal on its head, by letting the merchant control the amount of the discount so they’re not losing money on it.

What’s the incentive for a small business’s customers to share a deal with their social network?

A. The small business chooses the incentive. The reward might be an extra $5 discount on the coupon, or 20 percent off on a second visit, or a free item, or whatever the business wants to offer. But the biggest difference with SaveLocal is that the customer gets the reward just for sharing, whether or not the friends buy anything.

Q. By offering smaller discounts, your merchants may protect per-customer profits, but won’t the deals be less compelling to consumers?

A. We’re seeing success with discounts of less than half off. We haven’t tested it enough to know exactly at what point you get diminishing returns from decreasing the discount, but we’ve seen a customer be wildly successful with a 33 percent discount. A smaller discount might not attract as many customers, but it’s the rabid deal-seekers who are going to find it less appealing, and that’s not necessarily who small businesses want to attract.

We’re changing the whole economics of the deal. The daily deal companies not only make merchants offer about half off, they keep about half of what the merchant takes in on the deal. We only charge $1 to $3 for each coupon. And we help our customers think through the best way to structure the deal. Restaurants can offer a coupon for less than the average ticket and make more when the customer buys up, so that if customers spend $40 on a dinner, the merchant can offer a $20 coupon for $10, and keep all of the extra $20 that the customer spends.

Q. If your customers e-mail their offerings only to existing customers, are they giving up the opportunity to attract lots of new customers?

A. About a fifth of the people responding to our deals are new customers for the merchant. But more important, because they’re getting the offer through an existing customer, they’re much more likely to be local than the people who respond to daily deals, and they’re much more likely to turn into loyal customers. They’re learning about the deal from an existing customer who’s endorsing the merchant. And we give merchants the means for following up, by helping the merchant get the new customer’s e-mail address and opt-in permission during the purchase process. Groupon and LivingSocial don’t share contact information with merchants.

Q. Why can’t a small business send out its own coupons to its own mailing list? Why does it need you?

A. We make it easier and help them structure and manage the deal. We handle the redemption, and we gather and analyze the data, so the merchant can understand the true R.O.I. of the deal based on how much customers spent and how much of it was discounted. And we make it ridiculously affordable.

Q. How do you calculate the return on investment?

A. We think about R.O.I. in two stages. First, the small business wants to know if it made money just on the purchases made by both existing and new customers when they use the coupons, and we track all that to tell our customers exactly how much was spent on the total purchase versus what the business spent on the promotion.

Then we look at the longer-term R.O.I. by tracking how many new customers were brought in and whether they’re being turned into loyal repeat customers by collecting their e-mail addresses with permission for the small business to contact them. We’ll continue to track that longer-term R.O.I. and help our customers take advantage of it with e-mail campaigns.

From the deals that have been done with SaveLocal so far, we’ve seen a good R.O.I. just on the first stage, and now we’re starting to see it on the second stage.

[You can read about a business that tried SaveLocal and one that chose not to at]

Q. Not all businesses have their customers’ e-mails. Can this work for a business that hasn’t been collecting e-mails?

A. Certainly it wouldn’t be starting from as strong a point as a business that has the e-mail addresses, but yes, a small business can start off SaveLocal through sharing over a social network. We believe it’s important that every small business build that e-mail list, and these offers create a great incentive for customers to get on it.

Q. How is your core business of e-mail-based marketing holding up? Is it being replaced by social-media marketing?

A. We do help customers with social-network campaigns, but e-mail is still one of the fundamental channels of communication. Facebook just released the statistic that on average only 12 percent of the people that “like” a page see a new message from the page owner show up in their news feed. The typical small business only has about 100 people who like their page, which means a total of 12 people are seeing the message. The typical small business has more than 2,000 names on an e-mail list. It wouldn’t be smart to stop communicating to those 2,000 people in order to focus on the 100 people they might be able to reach on Facebook.

Share RecommendKeepReplyMark as Last Read
Previous 10 Next 10 

Copyright © 1995-2018 Knight Sac Media. All rights reserved.Stock quotes are delayed at least 15 minutes - See Terms of Use.