In the spring of 2011 Groupon’s founders turned down a $6 billion buy-out offer from Google in favor of going public and getting rich(er). Seemed like a pretty stupid decision to anyone who had ever tried a Groupon deal and never gone back, * but hey, Wall Street knows what it’s doing, right? I suppose it does, because a year ago November the ipo came out and enough shares were sold at $20 per that the market capitalization soared to $12.7 billion. The banks who arranged that offering must have made out like bandits, you should pardon the term, and I assume those founders cashed out, but the fundamentals of the company and its business hadn’t changed and the Groupon adventure was bound for an unhappy ending.
If all this was apparent to a lowly dumb real estate agent sitting around in his pajamas drafting indignant screeds about life and politics, who couldn’t figure it out? Or, in view of the upcoming holiday, perhaps the appropriate question is who’d Wall Street find to dump this turkey on?
The stock closed at $2.87 yesterday and is headed to zero. Market value has dropped from that $12.7 billion to $1.81 billion, employees are being shoved overboard en masse and still someone’s out there buying shares and asking for more. Boy will they get it.
* an observation repeated three more times that year.