Thursday, August 18, 2011

More Worry about Groupon

It is also worth noting that, in the history of the company, Groupon has raised a total of $1.1 billion of cash--and paid out $942 million of that cash to its early investors and executives (highly unusual for such a young company). If Groupon does get into cash trouble, therefore, it will not be because the company didn't discover an amazing new business opportunity or raise all the capital it needed. It will be because of, well, greed.
The above comes from a Business Insider Article which really is worth reading in full.

Given the nature of markets currently and runs on dollars, euros and share value decapitations it is not too unrealistic to think that unless Groupn can come up with answers quickly then they are going to see a reduciton in offers from businesses who clearly see a possibility of not being paid in the future. Reality and perception again. The voucher money may very well be safe but if they have any doubts will they stop providing product. Less product less cash flow, catastrophic collapse. It si not an impossible scenario. 
Given the figures in the opening paragraph however it does look like a certain banking sector scenario with large payouts regardles of the reality...

1 comment:

Anonymous said...

Does TM have any update on this?