Groupon Announces First Quarter 2012 Results | Hacker News Reader

Groupon Announces First Quarter 2012 Results

businesswire.com

51 pointslarrys47 comments

These numbers were released after the close, but every trader and their brother was buying this morning. Insider trading is rampant on Wall St. This is clearly yesterday's news for the privileged few.

These guys are widely seen as a shifty bunch.

Insider trading is like pissing in the pool. It sounds dirty, but really isn't that big a deal.

http://twitter.com/#!/GSElevator/status/197718817382739968

>every trader and their brother was buying this morning

I've noticed over the past year that such stock price behavior is particularly acute near market close (which is perhaps when the less-priviledged-of-the-priviledged-few get in on the info.).

Eh, it's actually because everyone who's shorting GRPN covering their shares prior to the catalyst event. Everybody knew that GRPN's earnings were going to be positive (not positive but that it's going from red ink to earning $0.01/share, ha), so even though this company is POS. For the short-term, you don't want to going against the herd who will be turning around from bashing to mildly praising. When shorts cover, it's a wave that eventually lead to a squeeze which causes more shorts to cover - lifting the price.

Personally, this is a great event. GRPN will go up a little, leaving it more room for the slow bleed later and given that there's also weekly option series. GRPN is a great stock to trade.

So revenues up from $295m to $559m and operating income from -$146mn to $-12mn. Managing to grow revenue while narrowing the gap to black by quite a margin, good on them. I just wish they would quite re-stating the non-GAAP numbers. What value do they have beyond letting the press release have a dubious headline?

Actually most companies and ALL analysts use non-GAAP numbers (search for your favorite company + non-gaap https://www.google.com/search?sourceid=chrome&ie=UTF-8&#...)... it reflects the true nature of the business. They are also referred to as pro-forma numbers. There isn't any funny business going on here. It is good that we have GAAP so you can compare apples to apples in different industries but for a further breakdown non-GAAP numbers are very useful to an analyst.

Yeah but the non-GAAP numbers exclude customer acquisition costs (e.g. marketing). Not sure why that's excluded as marketing is a continuous and fundamental cost of doing business.

No they don't. You misunderstood what acquisition-related costs means. Acquisition related costs are costs related to acquiring another company, not acquiring a customer. It is completely standard practice to treat one-time costs like that differently.

Ok, sorry, I misunderstood. I had lingering memories of the critiques against groupons earlier non-GAAP measures [1][2][3][4][5][6] but the non-GAAP net income mostly seems to exclude stock, acquistion costs are pretty low and very clearly separated from marketing and customer acquisitions. Again, my bad.

[1] http://online.wsj.com/article/SB1000142405311190363560457647...

[2] http://www3.cfo.com/article/2012/2/banking-capital-markets_g...

[3] http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/530

[4] http://www.scalefinance.com/accounting-finance-and-groupons-...

[5] http://blog.agrawals.org/2011/09/24/groupons-cost-of-revenue...

[6] http://takingpitches.com/2011/06/04/groupon-s1-ipo-marketing...

What worries me is that Groupon is still just a company that 'happened' to be able to raise enough capital to become the biggest of 100s of businesses all doing the same thing.

Nothing about their business is hard to replicate, nothing is revolutionary, nothing has not been done before.

It seems many investors and analysts see a 'social media shopping experience' while all I see is a flyer in my mailbox 'on the internet'.

What's to stop Groupon from becoming the MySpace of online coupons to a future Facebook in the same sphere?

This is somewhat true of Amazon as well, though they later went on innovate with their web services. Early on they just happened to be one of the first and capitalized on their access to cheap capital.

I don't think Amazon falls into the same bucket. Most of what Amazon does is a bit better than its would-be competition. Whereas what Groupon does is exactly what everyone else would do.

I agree.

What a lot of people don't realize is that Amazon has amazing logistics and considerable skill in merchandising. Building that logistics footprint is why Amazon has survived and others failed (speaking as someone who worked for an early competitor).

Look at Best Buy and ask yourself, is Amazon really so easy to replicate?

Granted... I still don't think Amazon is worth the crazy multiple that they trade at, but you can't put them in the same class of company as GroupOn.

What GroupOn has is a brand name and a legion of sales people and contacts with local businesses. Unfortunately, GroupOn has a way of doing terrible things to local businesses that can't operate at the scale of something like GroupOn and which lack (in a sadly large number of cases) the simple business math skills to know when a GroupOn deal is no good for them.

So, the two assets GroupOn has (brand and sales/contacts) are both fairly impaired and much more easily replicated than what Amazon has to offer: logistics, infrastructure and algorithmic secret sauce... not to mention brand and customer loyalty.

I would also argue that most investors see a huge premium in the non-tangible asset 'track record', where Amazon truly shines.

Looking at S3, E2 etc. it is easy to see that while Amazon has a fairly 'boring' bread a butter retail business they are also true innovators.

Absolutely Amazon is an innovator. And surprisingly so -- who would've predicted AWS?!

Amazon's distribution and logistical network is a major asset that would cost a ton of money to replicate. This is a major barrier to entry and Amazon's primary competitive advantage in the online retail space. Groupon's main advantage (other than being the first mover) is merely a giant e-mail list of customers and merchants, nothing that a scrappy team can't try to replicate on the cheap.

I think you underestimate the cost of a giant e-mail list of customers and merchants that's clean and they have some sort of relationship with.

If for some reason Groupon went under tomorrow, what do you think that asset would be worth? As from my experience with sales, a lot.

I agree it would be worth a pretty penny. But $8 billion? I think not.

I'm not sure how big of an advantage it is, but isn't the "Groupon" brand fairly valuable? For a non-user of daily coupon sites like myself, the first site I'm going to visit if my daily-couponing interest is piqued, will be Groupon.

The counterargument of course, is that daily deals sites only attract the bargain hunters who have little to no brand loyalty, so even the "biggest brands in the business" don't have retention power.

Now that I've written this post out, perhaps the latter effect is in fact stronger...

Nothing. But these investors are only in for the short-term.

They will simply move on to the next thing.

Does this report in combination with the board members who resigned ~2 weeks ago smell somewhat...fishy...to anyone else? If things were going so well, why did 2 board members bail?

I think Groupon has far more potential than people assume. By being the biggest and having established some integration with local merchants, they could dominate the local space beyond just daily deals.

Except for the market is changing.

Which market isn't changing?. No good business is build assuming that market wont change.

On one hand, good for them and hopefully they'll be profitable in Q2.

On the other hand, how can we be sure these are the real numbers will all of the recent scandal?

Hopefully, because the SEC is doing their job.

Unfortunately its not about the desire for the SEC todo their job, its ability.

New top-grads in finance (and highly sought after performers) go to work at large banks simply based on incentive structures. The SEC is out gunned from the get-go.

I guess DHH will have to put his foot in his mouth now.

Nah. He already figured out what to say any time he's wrong: "Well, they won the lottery!"

The bleeding has slowed, but still bleeding. Difficult to gauge whether the patient will survive. That people pour(ed) so much money into this continues to astound me.

Also surprised by the upbeat comments here.

I'm surprised by the continued negative drum beating by some. The technocommentariat has had it in for their favorite "big Ponzi scheme" for awile but ... here Groupon is, not going bankrupt like the top comments in every related HN thread for the last year have assured us they shortly would. On the contrary they're doing great.

Yeah, losing $10+MM a quarter sure is "doing great" by any normal person's intepretation of the phrase.

Groupon (and the million of copies) only proves the need for better marketing options for businesses (all sizes).

It has broken the barries of online marketing by showing the common person that they can profit from internet marketing.

There is so much potential and money in this area that I sometimes wonder why more startups are not attacking it.

That is great news. Groupon is a great company that can help build local business, local communities and in turn raise the popsicle index.

That make it far more important than what Facebook or any other trendy startup is doing.

For everyone like me that has to look up the "Popsicle Index" here you go: http://solari.com/blog/the-popsicle-index-rant/

It's a succinct and catchy concept, the rant seems oversimplified IMO, but I do like the concept.

Ironically I think Popsicles actually reduce their own index! Empty calories and concentrated sugar being given to children probably harms their health in the long run.

Perhaps it needs to be replaced with a bottle of water?

True, but the whimsy of a popsicle is probably part of the reason the concept resonates with people.

Many people would disagree with you. Groupon has been shifty with their earnings and filings each time till now (e.g. http://blogs.cfainstitute.org/investor/2011/11/22/history-re...), and currently being investigated for it (http://ansonalex.com/infographics/groupon-sec-fililing-and-i...). There have been various statements by former/current employees about inflating prices (http://articles.businessinsider.com/2011-10-17/tech/30288824...), and others that find negative Yelp effect from Groupon (http://mybiasedcoin.blogspot.com/2012/03/groupon-effect-on-y...), and businesses almost shut down as a result (http://www.globalpost.com/dispatches/globalpost-blogs/weird-...)

Unfortunately "good" or surprising results do not justify a high valuation. Regardless of the company.

I won't get tired of saying this.

Ehh, I'm going to wait and read the story when their second set of numbers comes out. Happened twice so far...

Relevant + Show HN: https://analytics.savvr.com/login username: groupon / password: data

Interactive reporting of every Groupon deal, this demo account goes back to 2011.

What is the data source?

Our own data. We collect, cleanse and analyze data from the local commerce industry. Our database contains about 3M deals which represent around $4B in consumer spending. We currently track about 260 deal sites in North America, including Groupon.

Our platform is continually monitoring the industry from a variety of sources. The reporting platform and API runs off a dimensionally modeled DB. The UI is pretty rough at this point, really just a MVP to demonstrate our data and the direction we are headed.

GRPN reported $1,354,800,000 in gross billings for the quarter ending March 31st. You data shows $465,383,098. Still more scraping to do.

Our platform currently tracks Groupon.com which covers US and Canada. Groupon has 47 technically separate sites to make up their full international business.

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