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GroupOff - GRPN Back To IPO Price

Tyler Durden's picture





 

As of this moment, everyone who has bought and held GRPN stock since the IPO price is at best flat, and almost certainly at a massive loss, as only a few banks were allotted shares at the $20.00 offering price, which were quickly flipped to subsequent greater fools. As of this moment, GRPN is back to the IPO price or precisely $20.00. We expect once this is taken out for the one way Grouponzi Red Light Special to fair value, somewhere around $0.00, to take a few months at most.

Not for nothing, but we warned readers to wait for the Groupon Groupon one month ago...

 


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Tue, 11/22/2011 - 17:55 | Link to Comment devo
devo's picture

Didn't the co-founder of Groupon have a dozen other failed businesses? That he took the company public in this environment further confirms the guy doesn't give a shit. Easy short.

Tue, 11/22/2011 - 17:57 | Link to Comment Jump The Shark
Tue, 11/22/2011 - 18:04 | Link to Comment Buckaroo Banzai
Buckaroo Banzai's picture

"the train is now arriving at $20. All GRPN passengers who want to exit with the remainder of their wealth intact, please do so immediately. Next stop is zero. Thank you for riding the IPO Fleecing Express!"

Tue, 11/22/2011 - 18:09 | Link to Comment phyuckyiu
phyuckyiu's picture

I have a groupon offer for some groupon stock at half price. Must respond by Nov. 20th to be valid.

Tue, 11/22/2011 - 18:19 | Link to Comment Hard1
Hard1's picture

I still could not short the thing as it is not marginable, but now there are options.  Vol is high-ish but not off the charts, so you can buy puts now.

 

Disclosure note: I already bought puts.

Tue, 11/22/2011 - 18:21 | Link to Comment devo
devo's picture

What month? It'll probably take a year for this turd to sink. Leaps are probably expensive, no?

Tue, 11/22/2011 - 18:22 | Link to Comment junkyardjack
junkyardjack's picture

LNKD is still floating as if its a real business, GRPN isn't done yet.  Investors are slow to realize a broken business

Tue, 11/22/2011 - 18:30 | Link to Comment devo
devo's picture

Exactly. I would love to buy leaps on both Groupon and LNKD, but IV is too high. $8.80 for an August $45 strike? Meh.

Tue, 11/22/2011 - 19:06 | Link to Comment SilverIsKing
SilverIsKing's picture

wait for a rally or at a minimum, an up day before buying puts.  The leaps are too expensive so I would just keep buying some current month OTM puts and roll them over each month but I would only buy on days GRPN and market are up to keep the premiums down.  At some point, the puts will pay off big unless we get a slow grind down.

Tue, 11/22/2011 - 19:21 | Link to Comment devo
devo's picture

Yeah, luckily I bought some Dec puts right before the (first) debt ceiling debacle. Just felt something was wrong/going to shit. I've been waiting for IV/Vix to drop since so I can buy more, and it just hasn't...I can't believe people are trading every day with a +30 VIX. You'd think they'd get exhausted or be in the hospital. Then again, robots never tire...

The markets still want to go up. You can feel it. Habituation has taken place (i.e. People are immune to bad news, and react too strongly to any good news). To me this signals a big rally before a massive crash. I'm thinking crash in Jan/Feb followed by QE3 into the summer months to calm the markets before the election. If Obama gets a second term, Great Depression level crash. The only reason this is being propped up right now is so he can be reelected.

Tue, 11/22/2011 - 22:12 | Link to Comment UP Forester
UP Forester's picture

Revenge of the Golden Turdball, bitchez!

Tue, 11/22/2011 - 20:03 | Link to Comment Mark123
Mark123's picture

The primary dealers agree to support the stock price for a period of time.  You have to maintain the illusion of money making opportunities as long as possible.

 

I recall this IPO nonsense petering out late in the NASDAQ bubble.  Shortly after the entire market collapsed.

Tue, 11/22/2011 - 18:26 | Link to Comment Hard1
Hard1's picture

I bought dec11.  This turd seems to be sinking already, so are LNKD, CRM, Facebook when issued, Italy, and planet earth.  I said whip it....Whip it good!

Tue, 11/22/2011 - 18:38 | Link to Comment devo
devo's picture

Wow, that is extremely bearish. You're fighting both theta and a technically oversold stock...I hope it goes straight to 0 for you!

Tue, 11/22/2011 - 20:23 | Link to Comment Reform1776
Reform1776's picture

I also have LNKD & CRM puts. Also check out Jan PCLN(unlke other months, they go down to $90!). Also Feb AMZN Puts. Not thinking their tablet will be "all that", may outright stink, browser sux.). This is like the Internet bubble all over again!!!

 

 

Tue, 11/22/2011 - 18:00 | Link to Comment CPL
CPL's picture

Yup...

 

Anyone else find that seeing multi hundred point swings through the day feel completely normal now?

 

I could almost promise that at 10:30 the market shits the bed, then glimpsing at it around 5 it rebounds 100+ points.

Tue, 11/22/2011 - 20:26 | Link to Comment Reform1776
Reform1776's picture

Reminds me of Spring 2009. Except then had huge volume. Is it me or does volume *mostly* seems below average, even on big swing days?

Tue, 11/22/2011 - 17:53 | Link to Comment Debtless
Debtless's picture

Groupon. Groupoff.

Tue, 11/22/2011 - 18:16 | Link to Comment HedgeAccordingly
HedgeAccordingly's picture

Wax on or wax this - http://hedge.ly/gFWVSm

Tue, 11/22/2011 - 20:52 | Link to Comment Moe Howard
Moe Howard's picture

Wax on, thanx.

Tue, 11/22/2011 - 17:56 | Link to Comment TruthInSunshine
TruthInSunshine's picture

A small bakery in London that had a GRPN cupcake run is saying f**k GRPN, bitchez.

Yet another fatal flaw in GRPN's business model is revealed to the sheeple IPO buyers.

Bakery Burned in Groupon Deal for 102000 Cupcakes

- International Business Times

 

#ClubBabySealsButSaveJohnCorzine

Tue, 11/22/2011 - 18:01 | Link to Comment Conman
Conman's picture

Dont see how that is Groupon's fault. Stupid baker can't do math. Either way this business model sucks, wish i could have found some shares to short.

Tue, 11/22/2011 - 18:05 | Link to Comment TruthInSunshine
TruthInSunshine's picture

It's not "GRPN's fault," per say, that the bakery failed to take into account that it would be losing money, but given that GRPN's biz model depends, at least in significant part, on the willingness of businesses to team up with it, it's a monkey in the wrench or a monkey in the grease....errr...you know what I'm saying.

 

#LetFukushimaDaiichiGlowButExonerateJohnCorzine

Tue, 11/22/2011 - 18:57 | Link to Comment smiler03
smiler03's picture

Agreed!

To quote the owner (stupid baker) herself ""It's been an absolutely nightmare," Brown told the BBC. "Without doubt, the worst ever business decision I have made. "

Wed, 11/23/2011 - 00:43 | Link to Comment Fish Gone Bad
Fish Gone Bad's picture

There are a great many coupon sites.  There are pretty dedicated "moms" that just hammer this stuff out.  Take a look at Who Said Nothing in Life is Free: http://www.whosaidnothinginlifeisfree.com/ they kick out coupons and try to save people money all day long.  If they were any more incredible, they would be machines.

Tue, 11/22/2011 - 18:17 | Link to Comment Use of Weapons
Use of Weapons's picture

Hate to say this, but Reading is not in London.

Please, if you're going to link to stories, do a small bit of basic research and link to the original piece:

 

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/890465...

Tue, 11/22/2011 - 18:24 | Link to Comment TruthInSunshine
TruthInSunshine's picture

While it was in Reading & not London, so you're technically correct on that point, it's not at all material to the substantive point about GRPN's business model that's being made.

Tue, 11/22/2011 - 18:30 | Link to Comment Use of Weapons
Use of Weapons's picture

I take it by saying "technically correct", this is an another way of saying "absolutely correct" in America? Don't try and weasel me.

We're all aware of the insanity of the business model, in that it is attempting to leverage PR / market reach to get at cost (or worse, loss) prices for a consumer, taking a 30% cut for themselves.

 

I'm attempting to get some links on the third largest coupon company in the USA, and why it just dumped 90% of staff (ho-ho-ho). Google isn't playing nice though, which is odd.

Tue, 11/22/2011 - 18:38 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Technically correct is another way of saying your point about the geographic location of the bakery that got ass reamed by Grope On is triviality at best, and wasn't even worth noting, given the larger context and real significance of what occurred (i.e. businesses may become far more reluctant to participate in GRPN offerings given the risks/hassles/losses involved).

If this had happened in Tucson, Arizona, and you mistakenly had said it was Phoenix, I'd just had let it fly right by, because it matters not.

Tue, 11/22/2011 - 18:45 | Link to Comment Use of Weapons
Use of Weapons's picture

My disagreement was with the poor quality journalism, not yourself my Sunny truth seeker ;)

Tue, 11/22/2011 - 19:12 | Link to Comment smiler03
smiler03's picture

TIS You're still talking bollocks about Groupon being in the wrong. In the original article on the Daily Telegraph website, 98 out of 98 commenters agree that the woman who owns the bakery is a stupid incapable idiot and Groupon didn't do anything wrong. 

Disclosure. Groupon is a clear fucking failure. What kind of moron bought this IPO anyway? Perhaps the morons should open their own bakery.

Tue, 11/22/2011 - 17:53 | Link to Comment RaymondKHessel
RaymondKHessel's picture

CHA CHING

GM anyone?

Tue, 11/22/2011 - 19:52 | Link to Comment Mentaliusanything
Mentaliusanything's picture

GM -I holding out till it becomes a "Value Buy" or when Buffet  "Cums in a tub" over it

Tue, 11/22/2011 - 17:54 | Link to Comment BrocilyBeef
BrocilyBeef's picture

Thank god...

Tue, 11/22/2011 - 17:54 | Link to Comment FutureShock
FutureShock's picture

Lady lost 20 grand with Groupon making cupcakes. Better have you biz shit together and run some scenarios.

http://www.nydailynews.com/life-style/eats/cupcake-baker-ruined-groupon-deal-bakery-ended-filling-orders-102-000-cupcakes-article-1.981275

 

Tue, 11/22/2011 - 18:09 | Link to Comment CPL
CPL's picture

Holy crap...that's a court case and a serious fine.  Breaking contractual arrangements and causing loss due to negligence or being generally ambiguous.  I hope that lady makes out alright.  A baker is literally a large order away from going out of business.

Tue, 11/22/2011 - 20:50 | Link to Comment WonderDawg
WonderDawg's picture

Now if she was a banker rather than a baker, breaking contractual arrangements would be just fine.

Tue, 11/22/2011 - 17:54 | Link to Comment PaperBear
Tue, 11/22/2011 - 18:02 | Link to Comment PaperBear
PaperBear's picture

“This will set a precedent that will destroy the industry.”

Tue, 11/22/2011 - 17:58 | Link to Comment BlueStreet
BlueStreet's picture

Whitney is smelling an opportunity right about now.

 

Tue, 11/22/2011 - 17:59 | Link to Comment jcaz
jcaz's picture

I smell a secondary offering any minute now.......

Tue, 11/22/2011 - 18:00 | Link to Comment YHC-FTSE
YHC-FTSE's picture

Meh. When facebook goes IPO, it will be the mother of all gilded turds. 

Tue, 11/22/2011 - 18:02 | Link to Comment CPL
CPL's picture

It will be the single most amazing short in a single day.

Tue, 11/22/2011 - 18:01 | Link to Comment Westcoastliberal
Westcoastliberal's picture

The bakery story is a great example of what actually happens when a small business tries the "Groupon" approach.  But what the story doesn't mention is all the regular customers whose expectations were violated by the sudden influx of "bargain hunters" during the promotion.  Undoubtedly many won't be back and neither will the "new" customers when they're required to pay full price.  The bakery owner is out $20K for nothing.

I don't see this company lasting much longer.

Tue, 11/22/2011 - 18:03 | Link to Comment POpatriot
POpatriot's picture

How about LNKD?! It is trading at 10 times revenue and has a trailing PE of 940...Forward PE of 254.

Tue, 11/22/2011 - 18:06 | Link to Comment TruthInSunshine
TruthInSunshine's picture

Or as Abby Joseph Cohen would say:

"I see a lot of potential upside with this gem."

Tue, 11/22/2011 - 18:04 | Link to Comment jonan
jonan's picture

damn, i totally pussed out on this one, i should have bought those puts last monday!!!

Tue, 11/22/2011 - 18:14 | Link to Comment Rainman
Rainman's picture

Investing is for shmucks.....whistleblowing to the SEC is the moneymaker. Average is 7 bounty hunter reports per day.

http://www.bloomberg.com/news/2011-11-22/whistle-blowers-seek-rich-sec-bounties.html#

Tue, 11/22/2011 - 18:14 | Link to Comment pragmatic hobo
pragmatic hobo's picture

at $20 per share GRPN is still a $15B company ...

Tue, 11/22/2011 - 18:29 | Link to Comment dalasp
dalasp's picture

Seriously, not sure why this site gets so excited when something trades back to its offering price. Lets not forget that $20 is still above where bankers were intially pitching this thing.

Tue, 11/22/2011 - 18:38 | Link to Comment Use of Weapons
Use of Weapons's picture

Groupon is worth nothing close to $15 billion - it is pure fantasy, they've not closed nearly close to 10% of that amount, most of the "profits" have been investor cash getting cashed out by the founders so far.

Even their own strange accounting methods show a massive drop in % profit when scaled up, not to mention the fact it relies on having a small / medium sized business base that isn't getting fucked by a depression to work, and consumers willing to blow money on luxuries.

Those two alone signal to me that they're going the way of their competitors1, and will be hemorrhaging cash very soon, if not already.

  • 1. Third largest Coupon company in the US just cut 90% of workforce and is tanking
Tue, 11/22/2011 - 18:16 | Link to Comment LarryDavis
LarryDavis's picture

when is it optionable?

Tue, 11/22/2011 - 18:22 | Link to Comment jonan
jonan's picture

options started trading as of last monday...

Tue, 11/22/2011 - 18:28 | Link to Comment txsilverbug
txsilverbug's picture

Here's the solution.

 

Ben Bernanke needs to print more money, create massive inflation, and then the price will go back up.

 

Thanks

Tue, 11/22/2011 - 18:31 | Link to Comment RobotTrader
RobotTrader's picture

What is going down the fastest?

Social Media "concept" IPO's?

Or junior PM mining stocks?

Tough call......

Tue, 11/22/2011 - 18:40 | Link to Comment Rainman
Rainman's picture

I say Kim Kardashian

Tue, 11/22/2011 - 19:08 | Link to Comment navy62802
navy62802's picture

NFLX!!!

Tue, 11/22/2011 - 19:22 | Link to Comment Spastica Rex
Spastica Rex's picture

Your mom.

Tue, 11/22/2011 - 20:57 | Link to Comment Moe Howard
Moe Howard's picture

BINGO!

Tue, 11/22/2011 - 18:34 | Link to Comment DCon
DCon's picture

A UK headhunter is recruiting for jobs in Groupon's Swiss office. They are offering serious cash.

 

Swiss unemployment is based on salary and has no minimum work time before being eligible

 

If I could move to Switzerland and work for these clowns I would be gone in a heartbeat

 

 

Tue, 11/22/2011 - 18:42 | Link to Comment Use of Weapons
Use of Weapons's picture

That makes sense. The US market is saturated, so they're desperately trying to export the model to Europe, and the UK (as shown by cup-cake lady).

Problem: most business owners are aware of the horror stories out of the states by now, and the economies of Europe are just as bad as the USA, if not worse in many cases. Which means less cash for luxuries such as massages. Added to that is the 'snob factor' - unlike the US, coupons are pretty much viewed as a 'lower / working class' thing in the UK (and segments of Europe), which translates to less take up.

Tue, 11/22/2011 - 21:07 | Link to Comment PersonalRespons...
PersonalResponsibility's picture

I didn't junk you but came here to say that I backpacked across the pond 20 years ago (and had the privelage to walk on that land many times since) and found that people are the same all around the world; suckers here, suckers there.  Also, most people are good people everywhere.  If anything, it takes time for the bad news to travel from here to there; we crash first finalcially, we crash first in housing, we crash first via IPOs, we crash first in our music sucking.  Seems more to me that Europe and the rest of world just follow somewhat behind.  Maybe first to fail is a good stradegy?  Who knows. 

Wed, 11/23/2011 - 00:28 | Link to Comment billsykes
billsykes's picture

I agree, never in history has music erred towards ghetto music, rock n roll and now we are almost going on 20 years of the shit robot voices and 5 second loops repeated for 3 mins glorifing criminal activity and niggery. not black culture which is totally different.

Tue, 11/22/2011 - 18:44 | Link to Comment ZeroPower
ZeroPower's picture

 as only a few banks were allotted shares at the $20.00 offering price, which were quickly flipped to subsequent greater fools.

Big boys typically have a blackout on selling new issues or IPOs within 90 days

Tue, 11/22/2011 - 18:54 | Link to Comment Use of Weapons
Use of Weapons's picture

Big boys don't make money like that either.

I seem to remember this:

http://blogs.reuters.com/felix-salmon/2011/05/23/the-linkedin-ipo-debate/

http://www.theatlanticwire.com/technology/2011/05/goldman-sachs-shares-l...

The method being - lowball the IPO share price & hype # of shares / market demand, see a substantive short term gain, allow dumping after period to bring the stock back to "actual" market price, clients who got shares at original $20 & short term profits are happy, bank makes 7% + clients that stay with them giving fees, original company gets told to STFU as otherwise their real market price will be discovered. i.e. Bank's client gets shares "on the cheap", see huge raise, dump stock which brings it back to $20 ("the market price"), banks keep 7% + happy clients, company that IPO'd eats the difference in $ made.

Tue, 11/22/2011 - 22:45 | Link to Comment ZeroPower
ZeroPower's picture

Yes but youre forgetting that the syndicate team which does all work related to the debt or equity issue is responsible for a very tight range in price, otherwise the deal looks like a POS to everyone else in the know.

Consider: firm prices at $20, but stays in the $30 range the next weeks. This is a major faux-pas as underwriters could have (in simple terms) set the price about $10 higher on the primary as opposed to offering out for 20 and then feeding a loss to the firm. On the flip side, price too high from the get go, and there will be very low demand from the funds which always make up the primary offering.

Tue, 11/22/2011 - 18:56 | Link to Comment Franken_Stein
Franken_Stein's picture

Could anyone please give me the name of a put ?

 

I only found CT13TR but I don't get any greeks on it.

There are a lot of calls on groupon out there, but almost no puts.

Tue, 11/22/2011 - 18:58 | Link to Comment Franken_Stein
Franken_Stein's picture

And as I read shorting costs 0.4 $ /(day*share).

Tue, 11/22/2011 - 19:10 | Link to Comment Sneeze
Sneeze's picture

Minor squeeze coming... leave it for a few days. 

Tue, 11/22/2011 - 19:43 | Link to Comment El Viejo
El Viejo's picture

Yeah, the squeezes have been comin like clockwork. It seems the market bumps up before the middle and end of the month.

Tue, 11/22/2011 - 18:57 | Link to Comment americanspirit
americanspirit's picture

I think we need a Zerohedge ETF - like yesterday.

X-Ray market vision 24/7/365.

Tyler - you are the absolute best.

Tue, 11/22/2011 - 19:06 | Link to Comment El Viejo
El Viejo's picture

Looks similar to what AONE did after its IPO.

Tue, 11/22/2011 - 19:07 | Link to Comment navy62802
navy62802's picture

The tech bubble is re-inflating. Hopefully, this time, it will deflate itself slowly before it actually pops. This GRPN deflating is a good sign. I think there's definitely a place in the market for tech stocks, but 40% rise on an IPO just because it's an IPO is not healthy growth.

Tue, 11/22/2011 - 19:17 | Link to Comment Franken_Stein
Franken_Stein's picture

CT13TR (Strike: 17$, Expiry: 20.06.13):  0.51 $

CT13TS (Strike: 24$, Expiry: 20.06.13):  0.86 $

 

Tue, 11/22/2011 - 19:22 | Link to Comment Fix It Again Timmy
Fix It Again Timmy's picture

Wha. Whaaa, whaaaaaaaaaaaaaaaaaaaaaaaaaaaaaaat?  It should at least be $75.00 by now!!!

 

Tue, 11/22/2011 - 19:25 | Link to Comment XenOrbitalEnginE
XenOrbitalEnginE's picture

When all the semi-rich blokes around you have Apple Pod Phones, it seems that GRPN is a neat idea that helps....everyone.

I've called radio-connected video-phones "Leader Class Devices" before.  This is totally snarky of me and I'll still do it.   LCD people are "In a bubble", so of course a bubble will arise from the fads & fancies they devise.  Device. No, it's devise.  Both.

But I digress!

I don't suppose zh readers are LCD-centric, but I claim that a device that some sort of manager or flunky "needs" could actually be REALLY counter-productive for more sorts of working stiffs.

XOE

Tue, 11/22/2011 - 21:00 | Link to Comment Temporalist
Temporalist's picture

Of course it is counter productive.  When the average workers were given the internet they started slacking off.  Now putting a computer and internet device in their hands and they have it on them at all times...

There were congresspeople Twittering (what Twits do on Twitter) during an Obama speech. 

The the SEC took using the web to view porn to the Nth degree instead of watching the people that are playing with all the money.

 

Tue, 11/22/2011 - 21:02 | Link to Comment Moe Howard
Moe Howard's picture

Every minimum wage slave I see landscaping or money taking at the pump or whatever has his or her head ducked down reading or sending text messages and not paying attention to the job. I would bet for many of the around 30 yo group at my work that cell phone plans are THE major bill every month.

Give the chump a piece of shiny and he'll be happy with his lot in life.

Tue, 11/22/2011 - 19:38 | Link to Comment Montezuma
Montezuma's picture

Well what did people expect, having $644 million on sales in Q1 this year and not making any profit. This was so BS first time I heard the "buzz" about this company. Another rip off, same goes to the other shitty IPOs this season.

Tue, 11/22/2011 - 19:48 | Link to Comment Mark123
Mark123's picture

Wouldn't it be great to have an IPO for a real company with a real product that was structured to raise working capital rather than shower wall street whores with ponzi bucks.

Tue, 11/22/2011 - 19:56 | Link to Comment azzhatter
azzhatter's picture

Some of these jagoffs think they could package a turd and sell it as a snickers bar. That's what groupon is, was, and always will be. See you in the scrap heap

Tue, 11/22/2011 - 19:59 | Link to Comment Mark123
Mark123's picture

As one poster above mentioned....check out GM....down to $20 too.  Of all IPOs I thought they would support this to the bitter end to save face for Obama and the gang.

Most people bought around $35....some higher.  I can't recall, but wasn't the UAW a big "investor" in the IPO too?  Wonder how long before the next bailout.

Tue, 11/22/2011 - 20:04 | Link to Comment Downtoolong
Downtoolong's picture

And another flock of skinny sheep shivering in the cold are herded out of the corral until next season. Of course, if they fail to show up with any new wool, the will be shown the gate to the slaughterhouse.

Tue, 11/22/2011 - 20:10 | Link to Comment pleseus
pleseus's picture

The shit ain't worth two bucks.

Tue, 11/22/2011 - 20:38 | Link to Comment Temporalist
Temporalist's picture

Groupwnd

Tue, 11/22/2011 - 21:04 | Link to Comment Moe Howard
Moe Howard's picture

They should sell gropeons for lapdances now that might generate some real cash.

Tue, 11/22/2011 - 21:13 | Link to Comment tmftdoyle
tmftdoyle's picture

The biggest lie, this time around in dot com mania, spread by the very venture funds looking to punt to the greater fools, is that unlike 1999, the companies are now profitable. Anyone bother to look at the numbers, rather than taking this false advertising at face value!

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