Groupoem

“Gather round, dear investors, and hear all about
The worst IPO that has ever come out”

Yesterday I dissected the three main reasons why people lost money in Groupon ($GRPN) here on the site.  I do this because I think it is more helpful to investors than 99% of the “content” being published and because in the writing, I am able to clarify my own thoughts and discover what it is that I actually believe right alongside the reader. 

I got a bit of criticism for coming off as a bit of a Monday morning quarterback re: GRPN so I thought I’d dust off this lost classic from last October, published on the eve of Groupon’s IPO.  Yes, I have begun pompously referring to my own posts as “lost classics,” what do you want from me? – JB

***

Groupoem (or an IPO for the ages)

Gather round, dear investors, and hear all about
The worst IPO that has ever come out
It’s hitting this week if the stars align right
But only the foolish would look for a bite

For Groupon is now past the peak of its glory
Its promising start a well-known story
Of youthful intensity, vision and zeal
Of crafting the perfect consumer-led deal

City by city, Groupon grew like a weed
Positioned as marketing for the small biz in need
Coupons for shoes and coupons for socks
Offers for Lasik and half-off on Crocs

Then Google came calling, six bil on the table
But Groupon bought into their very own fable
The emails would issue from CEO Mason
“Hang on tight,” Andrew said, “our competitors are chasin'”

So onward and upward the company went
Taking in money that it promptly spent
The trick was to pay merchants sixty days late
Which gave Groupon money and time to inflate

The accountants concluded the scheme was impaired
Sure they were grumpy – but they also were scared
“A ponzi,” they called it, “it can’t be sustained!”
“If they run out of room to expand they’ll be drained!”

And one other headwind we also should mention
The social offers crown is still in contention
Both Amazon and Google desire to play
Good luck keeping those two rottweilers at bay

The first IPO filing was put back on the shelf
A value of thirty billion soon became twelve
And as Groupon embarked on its period of quiet
A leaked memo from Mason created a riot

The regulators didn’t find any of this funny
The rules get much stricter when you’re trying to raise money
Poor Andrew was learning a lesson for sure
Being boyish and charming wouldn’t help him no more

So with shady accounting and rivals galore
Groupon now brings its stock to the floor
Sixteen to eighteen per share is the word
With a float so constrained it’s completely absurd

Less than five percent of Groupon shares will go pub
An insulting debut, why that’s barely a stub!
They’ll create quite a show with this scarcity bait
The intentions are clear, to manipulate

By producing a noteworthy opening pop
The underwriters get to market their shop
So Facebook and others will watch and learn
Which bankers to hire when it’s finally their turn

In the meantime the VCs in Groupon are thrilled
Their exit is coming, the champagne is chilled
A too-close encounter with death is postponed
While retail investors line up to get boned

The next Demand Media or LinkedIn perhaps
And look how it fell right into their laps!
They’ll buy that first day as up-stocks attract cash
While the insiders prepare to make their last dash

Mason will get his chance to be boss
At a big public company, come profit or loss
And all will be well on The Street named Wall
As the bankers await Mr. Zuckerberg’s call

– Downtown Josh Brown, October 30th 2011

Read Also:

The Netflix and the Blockbuster by Lewis Carroll (TRB)

 

 

Tags:

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

Wealthcast Media, an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here: https://www.ritholtzwealth.com/advertising-disclaimers

Please see disclosures here.

What's been said:

Discussions found on the web
  1. everyday beauty tips commented on Aug 18

    everyday beauty tips

    […]check beneath, are some completely unrelated internet websites to ours, however, they’re most trustworthy sources that we use[…]

  2. کولر صنعتی commented on Aug 19

    خرید کولر صنعتی

    Howdy just wanted to give you a short heads up and permit you know a couple of of the pictures are not loading correctly. I’m not positive why but I think its a linking concern. I’ve tried out it in two different internet browsers and both show the ide…

  3. mcat verbal tutor commented on Aug 19

    mcat verbal tutor

    […]we like to honor numerous other internet web sites around the net, even when they aren’t linked to us, by linking to them. Beneath are some webpages worth checking out[…]

  4. Butt Plug commented on Aug 19

    Butt Plug

    […]below you’ll find the link to some sites that we assume you’ll want to visit[…]

  5. Adam and Eve Packaging commented on Aug 20

    Adam and Eve Packaging

    […]Here are a number of the web sites we advocate for our visitors[…]

  6. jasa bola commented on Aug 20

    jasa bola

    […]below you’ll obtain the link to some web sites that we assume you should visit[…]

  7. voyante marocaine lyon commented on Aug 20

    voyante marocaine lyon

    […]although sites we backlink to beneath are considerably not associated to ours, we feel they are essentially really worth a go through, so possess a look[…]

  8. airline tickets commented on Aug 21

    airline tickets

    […]the time to read or check out the content material or web pages we have linked to beneath the[…]

  9. Alexander McQueen commented on Aug 22

    Alexander McQueen

    […]The data mentioned in the post are a few of the most beneficial offered […]

  10. Burberry commented on Aug 22

    Burberry

    […]Here are a number of the sites we advise for our visitors[…]

  11. Salvatore Ferragamo commented on Aug 23

    Salvatore Ferragamo

    […]very few web sites that happen to become comprehensive below, from our point of view are undoubtedly very well really worth checking out[…]

  12. Tom Ford commented on Aug 23

    Tom Ford

    […]below you will locate the link to some websites that we feel you should visit[…]

  13. lesbico commented on Aug 23

    lesbico

    […]one of our guests just lately suggested the following website[…]

  14. خرید vpn commented on Aug 24

    vpn ایفون

    Listed here are a number of of the net web sites we suggest for our visitors