Until recently, most people praised Groupon for its simplistic business model and its incredible growth, which some have called the fastest of any company to date.
Groupon lets users purchase steeply discounted deals from local merchants. Discounts range anywhere from 30 to 80 percent off the regular sale price on food, trips, drinks at a local bar, etc. Groupon takes half of the money from every deal sold, which is a pretty easy way to bring in a lot of money without having to get creative.
But the Chicago-headquartered company is still running at a loss despite the astonishing revenue growth, which went from $94,000 in 2008 to $713 million in 2010, according to the filing. Groupon has consistently lost money every quarter since launching except for one — the first quarter of 2010, when it brought in an $8 million profit. Comparatively, it lost $146.5 million in the first quarter of 2011.
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Friday, June 24, 2011
Should you invest in the Grouponzi IPO?
On the heels of filing its $750 million initial public offering, online coupon startup Groupon is under heavy scrutiny from critics.
