I am not surprised. They've had a rough time since going public. Their model does not seem quite sustainable and entities that partner with them in offering deals must be either desperate or extremely confident that they can generate enough buzz and retain customers to offset their losses.
$1B in rev but $3 mm in losses without profitability in sight.
You can create a pretty "massive" company pretty quickly if you basically sell $10.00 for $9.97
Their size actually works against them. Lots of companies lose money in the early days, but are able to justify / demonstrate why and when they'll be profitable. If you already have $1 B in sales and are still operationally unprofitable ... how much more will it take?
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[ 3.4 ms ] story [ 32.4 ms ] threadSounds like a losing strategy to me.
http://www.google.com/finance?q=NASDAQ%3AGRPN
Brutal.
http://news.ycombinator.com/item?id=3870044
It still has another billion to go (now at an equity value of $2.56bn), I guess that shorting now hasn't got the upside/return it had 200 days ago.
Kudos to Dropbox and Airbnb for executing on great ideas and building awesome companies.
Kudos to YC and other early investors for finding a diamond in the rough.
They'll all make tons of money :)
But those lofty valuations come with lofty expectations. Groupon has over $1B in revenue and a $2B marketcap but is perceived as a failure.
You can create a pretty "massive" company pretty quickly if you basically sell $10.00 for $9.97
Their size actually works against them. Lots of companies lose money in the early days, but are able to justify / demonstrate why and when they'll be profitable. If you already have $1 B in sales and are still operationally unprofitable ... how much more will it take?