Groupon: More Madoff or Mozart?

OnlineMBA.com has come up with an interesting infographic for Groupon, highlighting some of the accolades and criticisms of the company.

Earlier in June, Groupon filed for an IPO of its common stock. The company refused a buyout offer from Google (Nasdaq: GOOG) valued at $6 billion.

Some of the pluses:

• Making coupons, a simple concept, fun and convenient.
  
  
• Being able to connect consumers operating online, to businesses that operate offline.
  
  
• Amid gripes, merchants end up doing multiple deals with Groupon because, well, some income is better than no income.

Some of the concerns:

• Some call Groupon a Ponzi scheme based on its methods of drawing in revs.
  
  
• Groupon raised $950 million in January, and filed its S-1 with only $209 million in cash. Most went to employees and early investors.
  
  
• Closer looks show that Groupon has peaked in its more mature markets.
  
  
• It costs Groupon $1.43 to make $1.00...generally not a good short-term business model.
  
  
• Studies have shown that Groupon customers are buying fewer and fewer deals.

So, a clever investor will do their own research before jumping in to Groupon.

Click here for the infographic.

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In