Comments on: What happened at Groupon?

By: PseudoTurtle

PseudoTurtle — Tue, 03 Apr 2012 17:54:58 +0000

Groupon’s business plan was to insure what is commonly known in accounting as the “Allowance for Bad Debt”. It is as simple as that.

This implicitly assumes the economy is a “going concern”, which is another accounting term meaning, all things being equal and no unnatural events occur, the company is likely to survive based on this business model.

Unfortunately, if the economy crashes, a business model like that will do the same thing as any insurer that is overwhelmed with claims — it will go bankrupt.

Duh!

By: DrGoose

DrGoose — Tue, 03 Apr 2012 03:49:28 +0000

Said a source who implored not to quote ‘im:
“Selling coupons? There’s risk to promote ‘em.
If one’s merchants one pre-funds,
But buyers want refunds,
Well then, they’ve got one by the scrotum.”

By: WeWereWallSt

WeWereWallSt — Mon, 02 Apr 2012 23:52:18 +0000

“Groupon sells a bunch of deals for a given merchant, gets lots of revenue as a result, keeps roughly half that revenue for itself, and then passes on the other half to the merchant in question.”

Felix, they don’t get “lots of revenue.” They collect all the cash from the deal, half of which isn’t theirs and never should have been counted as revenue. That they even tried to get that joke of an accounting policy over on the public should have sunk their IPO.

We called this piece of crap out of the box. It’s painful to watch the public lose so much money on it.