I'll make a prediction here: GRPN stock price will be under $5.00 by December 15, 2012 (maybe $1.00?) So if you want to be stupid and "BUY" then wait for their 60% off Groupon share price coupons! (Or, as Karl Denninger says, "There's crazy and then there's really crazy!")
Well, now, the share price of Groupon is crashing even faster than I ever dreamed possible. Today, Groupon shares took another massive pummeling and, as of today's market close, Groupon has taken a thrashing dropping almost 30% in one day (- $1.15) to close at an all-time low of $2.76!
Groupon (GRPN) shares were under heavy pressure Friday morning -- at one point hitting an all-time low -- after the daily deals company reported another disappointing earnings quarter.
Shares of Chicago-based Groupon were falling 23.5% to $3 just after the start of trading. Earlier in the session, shares dropped as low as $2.95. Additionally, the percentage decline puts Groupon on track for the second-worst single-day drop in its short public history. According to FactSet data, the steepest decline in a single session was a 27% plunge on Aug. 14.
The stock has plunged 85% during its time on the market as investors have grown increasingly worried about the vitality of the company's business model.
Investors are worried about Groupon's "Business model"! What? Just how healthy could any business model be that is founded upon Spam Mail?
Nevertheless, it is astounding how far and fast the once mighty have fallen! You'll remember that they were once offered $4 billion dollars for their business and they refused it. What's it worth now? A minor fraction of that?
Actually, I feel sorry for all those folks who have had hundreds of millions of dollar wiped off the books.
It will be a miracle if Groupon can survive in its current configuration for another six months, especially as the economy wanes. I predict bankruptcy or Groupon being sold before December 2013. Can Facebook be far behind?
They cannot stand another year of this. How could a stock go from over $26 in November of 2011 to $7.77 8 months later is simply astounding... It had hit a high of $31.14 at IPO. From $31.14 to $7.77 is a 70.24% drop!
Groupon continues to underperform the group. This is the second time this month that the stock has tumbled. On July 2 shares slid on news that Groupon Chairman Eric Lefkofsky was taking a step back from his role at the company. It's discouraging to see a Groupon co-founder turn his back on the company at such a critical time. In hindsight, Groupon shouldn't have turned down a possible takeover by Google (Nasdaq: GOOG) for a rumored $5.3 billion.
However you cut it, things don't look good for the daily deals site. Concerns over the financial health of the business are nothing new. Not only do I think the current stock price is well deserved, but I also have little confidence in management's ability to turn things around. I stand by my underperform CAPScall on the stock.
Gee? That article didn't have the happy ending "feel good talk" I was looking for.... Maybe this one will?
As the stock continued to slide, a Reuters report suggested the collapse had to do with economic weakness in Europe, where Groupon gets about a quarter of its revenue. Sameet Sinha, an analyst at B. Riley & Co., told the wire service, “Europe is a concern, obviously.” But Mahaney was less concerned about Europe, saying that there’s not much evidence it will cause a material risk to estimates. Rather, he tweaked his price target because of lower 2013 estimates.
Additionally, the stock has not yet stabilized since last week when Eric Lefkofsky, Groupon’s executive chairman and co-founder, said he had stepped back from day-to-day work with the company so he could devote more attention to his venture capital firm, comfortable with that step given the recent additions to Groupon’s executive team.
Groupon is expected to report second-quarter results in late July or early August.
No. That didn't sound too good at the end either! You know that when the bankruptcy talks come out and are denied, then there's smoke in the room.... Maybe fire in the kitchen....
Groupon has to be one of the greatest stock failures in history.... How will Facebook find a way to top that?
But, ultimately, smart old Mike, who can call stocks like Jimmy the Greek can call sports results can only chortle like a sick rooster. When I chuckle about this stuff and then look at the gold prices and see them depressed (not nearly as bad as this, though) my wife says,
"Yeah? If you are so smart, then why ain't you rich?"
NOTE: Groupon in Japan must be doing worse, actually. I haven't seen a Groupon advertisement in months. They've dropped off the map in japan and I hear nothing positive about them from women's magazine people and former users.
They say a picture speaks a thousand words. Here's a comic that does. It shows why we should be against all nationalization of industry and bailouts of industry and banks as well as tax increase and adding debt to our already un-payable debt.
Of course the free market system (which, by the way, we haven't ever really tried - there's always government control and cronyism) has its warts... But the way we do things now (bailouts, credit rate control, printing money, government take over of industry, government controlled education, medical care and retirement) just doesn't work. The fact that we're heading for bankruptcy (Greece is showing us what's going to happen to us soon enough) shows that we must stop this big government mentality.
If an industry like banks or big companies like General Motors or TEPCO in Japan go bankrupt, let them! Why do private companies get to keep profits but when they lose money the government wants to socialize their loses and stick it to the taxpayer?
And some taxpayers actually agree with this twisted logic?
Say in the case of a company like GM. If we bail them out, the same incompetent management get to keep their jobs. If they go bankrupt, a new group comes in and buys them up. The new group gets rid of the bad parts. The factories are still there, the buildings are still there, the new company needs someone to run those factories; they get rid of bad management and bad workers and start again. That's why they buy a bankrupt company in the first place; they think they can make it profitable!
But, when the government bails them out? The incompetents keep their jobs (and donate to the next election of those government people) and confused people in the public sector think that those industries should be nationalized. Yes. Nationalized and run ostensibly for a profit. Like the profitable venture that our, say, Japanese government has us at public debt of 229% of GDP.
What's wrong with this logic and this picture?
Anyway, the same old same old way of doing business that we've been doing for the last 40 years, since 1971, has got to stop.
Haven't we screwed up the world for our kids and their kid's kids enough as it is?
Monday morning (Sunday for most people who read this blog). I've got a ton of things to do but here's a few things I've been thinking about... Especially how, even a few days after press release, you can see proof of how messed up a company Linkedin Japan is. Linkedin Japan is a FAIL!
First up, though, before the bashing begins, for your enjoyment, a very cool video Mash-up by Hexstatic of Nancy Sinatra's sixties smash hit "These Boots Were Made For Walking"
The picture in Greece, whose troubles kicked off the crisis almost two years ago, is bleaker than ever. A new report from Athens' international debt inspectors -- the European Commission, the European Central Bank and the International Monetary Fund -- proved that a preliminary deal for a second package of rescue loans reached in July is already obsolete.
The report showed that in the past three months Greece's economic situation has deteriorated so dramatically that for the bank deal to remain in place, the official sector would have to provide some euro252 billion ($347 billion) in loans. Alternatively, to keep official loans at euro109 billion ($150 billion), banks would have to accept cuts of about 60 percent to the value of their Greek bonds.
….
100 Million Euros is insufficient. The IMF pegged the amount between 100 million and 200 million. There is absolutely no reason to suspect the minimum is needed. Indeed, there is every reason to expect 400 million euros is insufficient.
….
I believe 400 million Euros will prove way insufficient once Portugal, then Spain, then Italy get into trouble.
Like I said, I think we could see the bankruptcy of Greece any day now. If that happens, all bets are off and it's every man (family) for itself. I think people would be wise to draw out a good sum of money from the banks and have it at home for a few weeks just to be safe until we can see what is going to happen. I fear a "bank holiday" where it might not be possible to withdraw money (or possibly even use credit cards) from banks for a few days or even a week or two (or more?)
I always follow my own advice and I think I've done pretty well. I always mess up dates, though... But I predicted a bad situation in Autumn on 2011 and, well, here it is, autumn. Please refer to: Japan's Financial Armageddon is Coming in 60 Days?
I warned people in October of 2008 to buy gold and silver and to stock up on food (click the links for proof). At that time, gold was $724.08 an ounce (today gold is $1562.30) and silver was $9.11 an ounce (today silver stands at $47.40).
If you had taken my advice, you would have easily more than doubled your investment in gold and taken over a 520% profit on silver. It's still not too late to get into gold and silver but a price correction is coming so wait a bit.* There will be no price correction on food. Stock up now, while you can.
After the big Tohoku earthquake and tsunami, when the stores shelves were bare for a week or so (and no one knew at the time how things were going to turn out on the food and water situation) my family was fine; we had 6 months of food and water, enough for 5 people, stocked up and ready to go. When people panicked and ran away from Tokyo or when they were fighting for parking spaces at the local grocery store, or fighting for bottles of water, I only watched and shook my head in disbelief.
How can people be so gullible and foolish? How can people be so negligent and irresponsible not to be prepared?
…..
Let me give you fair warning again. Especially if you live in Japan:
1) Store up enough water for at least 2 months (6 months preferable)
2) Fill your bathtub with water every night (if water stops you can use for cleaning)
3) Today or this week, buy at least 2 months of canned food (6 months preferable)
4) It is still not too late! Start saving money every month by buying gold and silver. If you have some savings, take 33% of it out of the bank and buy gold. Take the other 33% and keep it at safe place at home.
It looks like we are headed for some really rough times. Better be prepared to stay out of the way.
The point I am ultimately making is that of course no one can predict the future but just because of that fact not being prepared is just plain foolish. I'm sure that there were many people in Tohoku before the earthquake and tsunami who could make the same claim that "No one could have predicted the future" so that's why many did not have food or water or the means to escape (same as many in Tokyo)... But this is not about predicting the future, this is about protecting yourselves and your family.
If you think this is about predicting the future, then use that same logic next time you buy auto, car, fire or life insurance. Don't need them, right? No one can predict the future.
While I mention Greece, another curious thing about the situation there is that it is not being mentioned on the MSM. There's lots about demonstrations in the USA, where things are peaceful for the most part, but in places like Greece, where the sh*t is about to hit the fan? Not a peep.
I had been looking at many videos on Youtube and others showing some very heavy fighting between rioters and police. I wish I would have bookmarked them. This one, though, give a good idea. This is not a friendly party.
The most worrisome point about the situation in Greece is that the government needs the police and military to stand by them to protect them from and increasingly angry and militant civilian gathering, yet, at the same time, even the Greek police and civil servants are furious about getting pay cuts and massive slashes to their pensions. I wonder how long until they switch sides?
What would that mean for Greece and the other countries in immediate danger (Spain, Portugal, Italy, Ireland?)
And, finally, I see the ridiculous announcement from Linkedin that they finally "launched their Japanese site". Well, that's one big strike against them; they're lying. The service was actually launched sometime before May of 2010.
How to correctly handle a new product or service release? (in Japan)
A new company/product/service will need to appoint somebody in Japan to handle PR for them in Japan and work with that company to make a plan.
A necessary part of any good plan of attack would be that the representatives in Japan arrange meetings with major media at least 1 - 2 weeks before Japanese release day, as pre-press release. This is critical.
If this sort of ground-work is not fully prepared by the company and their reps in Japan, I strongly suggest that the company postpone the release of the product/service (and fire their representatives and hire a competent company) and then get properly prepared. If this sort of pre-press release is done correctly, the Japanese media will then follow-up and prepare and study the circumstances of the product/service and company so that they may be able to publish and provide better information for the Japanese audience (don't forget that the Japanese media are competing with each other, too, to provide up-to-date concise information, so this has to be done. No short-cuts here). This is critical for the success of any new company in Japan.
Even after years of repeated failures byvarious companies, to this very day, foreign companies come to Japan and repeat the mistakes Pepsi Cola and Seven-Up made decades ago. Some recent examples are Linkedin; E-Bay Japan, Google.jp, and a few others. (I strongly suspect Sugarsync is about to make the same mistake too!)
Take, for example, Linked-in. Linked-in came out with a Japanese version quite a while back but no one here in Japan uses it because no one knows about it; they had no local representation; no pre-press release information.
Kind of shocking, when you think about it; a supposedly forward thinking company coming to Japan and making such an amateurish mistake.
Well, Linkedin made that mistake. I also am quite familiar with this as I wrote a letter to Linkedin twice in early 2010 offering them a partnership with some companies that suggested tying up with Sony and placing the Linkedin software with all new Vaio computers sold. I sent them the letter twice. Twice, no response. Chuckle. Now, they've realized almost 1.5 years later that no one uses their Japanese language product (and probably won't). They blew a golden opportunity to tie up with one of the biggest companies in Japan... Now, what are they going to do?
You don't penetrate the Japanese market on the cheap and you usually have only one chance to get it right.
Let me make a prediction that I will stand by completely: Linkedin Japan will be a flop and failure along the lines of E-Bay in Japan.
Well, it's the start of another week. Keep positive. Write down your goals and smile.
