I know know value investing board. What i'm i thinking?! So we know all the problems with groupon and 80-90 percent drop since IPO. Lets look at the actual business economics. After looking at the float/moat presentation i have a bit more clarity with it.
Groupon Goods= Its the same business model as overstock. The insane thing about it after one year in operation its rate run is about 1.5 billion. Thats impressive growth although its a low margin business. This shows the power of leveraging the groupon brand.
Daily Deal= The daily deal is a high margin business where essentially it gives groupon "float" by getting an advance from customers ( buying the groupon deal). The float is costless cause they are the middlemen in the deal making process. They get a 50 percent split of the total deal. Is the float permanent? I would say yes unless all the customers demand a refund.
Negative working capital which means everything is financed by accounts payable and accured expenses.
Conclusion
I dont have the time to give more of a detail look into groupon, but bascially they create float to finance there business operations. The mistake groupon made is that they tried to grow to fast which elevated there sg & a. They havent reached critical mass yet but they will. Groupon is a innovative company that will create more businesses like groupon goods by leveraging there brand name. I think groupon has zero chance of going bankrupt cause it finances there business with float not LTD.
Disclosure: long grpn ( its up 20 + percent today due to google takeover rumors. Its all noise )