Facebook and the Big Fat IPO

Here are some impressive numbers on Facebook’s announced IPO in 2012. Is it overvalued? Would Facebook’s business model, founded on advertising revenue, be enough to satisfy the fat cats of Wall Street? What is sure is that the Facebook phenomenon is massive and still growing and that this IPO will make Mark Zuckerberg rich, very rich! Continue reading

Bargain-buy portal Groupon: Dictation of the Cheap

Photo by Groupon

Groupon is a provider of local discount campaigns; its name is wordplay between “group-buying” and “coupon”. In November 2011 Groupon went public, three years after its foundation.  Among the listed online service companies, only Google has a higher market value. The company has existed for twelve years and boasts, 24.000 employees and huge profits. Never before has a North-American company grown as fast as Groupon! Several industry experts think that the bubble will burst soon, however. The American analyst Rakesh Agrawal warns that Groupon will not be able to survive without rapidly gaining of new clients; and that is only possible with extensive marketing expenses of almost a billion US-Dollars per year. According to the documents provided on the stock exchange supervision, Groupon almost had to declare insolvency in the last few months. In September Groupon had 240 million in cash, but double this amount in debt. Agrawal’s accusations against the management appear to be well substantiated. Groupon’s IPO almost failed due to dubious balancing methods, billing errors and disregard of confidential information. The US-stock exchange supervision already dismissed their applications twice. The last application was eventually approved, so Groupon went public. Continue reading