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. coffee, 100% kona commented on May 29

    coffee, 100% kona

    […]here are some links to internet sites that we link to simply because we feel they may be really worth visiting[…]

  2. download music video commented on May 30

    download music video

    […]very couple of web sites that transpire to be detailed beneath, from our point of view are undoubtedly nicely worth checking out[…]

  3. clínica de reabilitação commented on May 30

    clínica de reabilitação

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

  4. honey usa commented on May 30

    honey usa

    […]that may be the end of this write-up. Right here you’ll locate some sites that we assume you’ll appreciate, just click the links over[…]

  5. best vibrating dildo commented on May 31

    best vibrating dildo

    […]Every the moment inside a although we opt for blogs that we read. Listed beneath would be the most up-to-date websites that we select […]

  6. womens sex toy commented on May 31

    womens sex toy

    […]please check out the internet sites we comply with, like this 1, as it represents our picks through the web[…]

  7. g spot stimulator commented on May 31

    g spot stimulator

    […]very couple of sites that transpire to become comprehensive beneath, from our point of view are undoubtedly well really worth checking out[…]

  8. business 2 business commented on May 31

    business 2 business

    […]please check out the internet sites we adhere to, such as this 1, because it represents our picks through the web[…]

  9. triple vibrator commented on May 31

    triple vibrator

    […]Wonderful story, reckoned we could combine a number of unrelated information, nevertheless truly worth taking a appear, whoa did one master about Mid East has got additional problerms too […]

  10. marketing news commented on May 31

    marketing news

    […]we prefer to honor many other online sites around the net, even though they aren’t linked to us, by linking to them. Below are some webpages worth checking out[…]

  11. nipple orgasm commented on May 31

    nipple orgasm

    […]below you will uncover the link to some sites that we consider you ought to visit[…]

  12. home improvement write offs commented on May 31

    home improvement write offs

    […]here are some links to internet sites that we link to because we assume they are worth visiting[…]

  13. free apps download for windows 10 commented on May 31

    free apps download for windows 10

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

  14. atlanta basement finishing commented on Jun 01

    atlanta basement finishing

    […]below you’ll find the link to some web sites that we feel it is best to visit[…]

  15. business improvement area toronto commented on Jun 01

    business improvement area toronto

    […]always a major fan of linking to bloggers that I adore but really don’t get a whole lot of link enjoy from[…]