A quick Google news search finds similarly uniform negative sentiment in the general web.
Brings to mind Warren Buffet's famous quote about investing - "The time to get interested is when no one else is. You can’t buy what is popular and do well."
The negativity surrounding Groupon isn't that they're boring; the negativity is that they're over-hyped.
This reminds me of the pre-Google IPO arguments.
It became popular in the press to pot-shot Google in the days leading up to their IPO.
Their revenue model was too tied to search.
Their IPO structure wasn't sound.
Their biggest growth was behind them.
Groupon is no Google today, but they do have a visionary founder, an incredible brand, insane revenue growth, and address a real problem for merchants and consumers.
Based on nostalgic feelings about the 2000s?
Warren Buffet and his daughter wrote a whole book on how to go over a company's P&L statements line-by-line and determine whether or not it's a value. Groupon fails that test. That quote is about buying companies that are doing better than the market thinks they are -- and his methodology is a way to find and prove those cases on paper. Not with hunches.
Can you back this sentiment up with anything more than vague comparisons to Google?
"Groupon is no Google today, but they do have a visionary founder, an incredible brand, insane revenue growth, and address a real problem for merchants and consumers."
or see my comments here:
http://news.ycombinator.com/item?id=2618080
and here:
Also, if there is general negative sentiment (not just isolated as it is now) about Groupon, there won't be an IPO. It could easily be withdrawn and if it is withdrawn, it likely won't come back if what everyone is saying here on HN is true.
At this year's shareholder's meeting, someone asked him and his business partner, Charlie Munger, which industry they wish they knew more about. Charlie said "technology."
Warren Buffet doesn't invest in IPOs as far as I've read. It makes sense because these are very hyped events that are designed to be the opposite of boring or overlooked.
Investing in IPOs is very much a gamble over which the the investor has no control. It is like buying a lottery ticket in many cases.
Warrren Buffet buys into companies in such a way that he get's control and usually those companies are struggling and need a management overhaul in order to be successful and have a better long-term focus.
I can imagine Groupon crashing and burning and then someone like Warren Buffet or another takeover happening and then its rebuilding. But buying into a hyped IPO before a fall is not at all Warren Buffet's investing strategy.
Which, by the way, is in marked contrast to the kind of negative buzz Google had at the time of their IPO. There were legitimate doubts about the sustainability of their business model, in part because they were deliberately concealing the size of their profits as long as they could to avoid attracting competition. (See Levy, "In the Plex".) But at the time they went public, they were making money, in much larger amounts than anybody outside the company had realized.
As to Groupon: if dhh is reading the balance sheet right, they need the proceeds of the IPO just to keep the company going, unless something very dramatic happens soon. They have only two quarters' worth of cash on hand at the current burn rate. The $750 million from the IPO will extend that by about two years (if the burn rate doesn't go up!). But if you invest, then you're counting on management to pull a not-yet-evident rabbit out of a hat within that time. And you're expecting that from a management team that put most of the roughly $1 billion that they raised off private markets in the last two rounds in their own private pockets (they sold founder shares to the VCs), leaving only $150 million available to the business itself as working capital.
Good luck!
"Rule No.1: Never lose money. Rule No.2: Never forget rule No.1"
I don't think Buffet advocates turning off your brain completely.
At this point in the tech boom, an underwhelming IPO wouldn't be a bad thing.