Archive for October 30, 2011

Groupon’s IPO Stock Price

As Groupon’s IPO nears its debut on November 4th, the company is rumored to want to increase its stock issuing price due to the positive reception of its IPO roadshow. Some call this “not leaving money on the table”.

It would be a risky game for the company to raise its price in this already highly speculative and risky IPO. Groupon needs the cash. Investors need to see a high upside. VCs need liquidity. Nobody wants to see an IPO that flops, and even less so Groupon collapse, as argued by Rocky Agrawal in Venturebeat.

Groupon’s IPO stock price could at first rise well above the current asking price of $16-$18 as a result of the well orchestrated speculative rally. Past the IPO fever of the first day(s), many smart investors will take their profit and the price will fall to the lower levels more closely related to the company’s financial outlook – as happened in most recent IPOs.

By raising its price, Groupon could chill investors and prevent the rally.

There are major flaws in Groupon’s fundamentals : 1) growth slowdown, 2) commission erosion, 3) short-term liabilities, 4) diminishing revenue per subscriber, 5) questionable operating efficiency, 6) questionable management ability to lead a quoted company. This issues are not addressed in the rosy picture painted by the company’s roadshow. According to these fundamentals, Groupon does not command the price it is currently asking for, and even less so a higher price.

But Groupon could be one of many stock prices decorrelated from their companies’ fundamentals.

These issues are discussed in the remaining of this post which updates and expands on a detailed analysis I published in June under the title Groupon Bashing Unleashed

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Tribute To John McCarthy

 

John McCarthy Stanford 2006
John McCarthy Stanford 2006 Picture from Wikipedia

John McCarthy, often dubbed the “father of artificial intelligence” (AI), passed away on October 24th 2011. He was a scientist of genius whose work is now bearing fruit, among others, in cloud computing, knowledge management and natural language processing. May he rest in peace.

Not much connection with eCommerce? Well, stay with me as I’d like to pay a small tribute to a great man and share a few insights I draw from his life and work… Read more

Kindle Fire: 1st Mobile Shopping Device

 

Kindle Fire
Kindle Fire by Amazon

Analysts are upping their forecasts for Amazon Kindle Fire’s US sales to 5 million before year end. Departing from its first e-book incarnations, the Kindle Fire is a full colour, touch screen tablet with a proprietary browser called Silk.

Most commentators are discussing what it will do to media distribution and the iPad.

In this post, I argue that the Kindle Fire is not an eBook, much more than a rich media tablet, probably our first real mobile shopping device

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Facebook Timeline: Bigger Share of Life

Facebook's Timeline

Facebook's Timeline Displays the User's History Along a Time Line

Facebook has recently introduced a slew of new features such as the ability to subscribe to another user’s news feed without counting him or her as friend and the ability to define smart lists of close and less close friends. Thank Google + for that!

But the most important Facebook innovation, now officially released, does not owe anything to Google. It’s the new version of Facebook users’ profile called the timeline. The timeline displays along a time line the entire history of a user’s Facebook activities — posts, pictures, likes etc. — since he or she joined Facebook. It’s a great tool for users. Most importantly, it is a great marketing move from Facebook because it creates an environment where the social network can hope to get a even bigger share of life of its users.

On this post I argue that eCommerce sites should take a leaf from Facebook and launch their own customer time line… Read more