If you invested in Groupon's IPO, the good news is you've only lost half of your money

Groupon Stocks

In less than a month, Groupon’s highly-lauded stocks have plummeted from their IPO sale price of $28 closing today at $15.24, down 46% since their November 4th initial public offering. That’s the good news.

The bad news is that recovery, if any, will be short-lived. We anticipated bad times, declaring that Groupon was not IPO-ready, but it appears that things are worse than we thought. Since going public, Groupon has done very little to enhance or promote their product the way that a newly-public company normally would. Their “big launch” this month of an “exciting new feature” is, for the most part, unknown to everyone. Why? Because their marketing blitz yielded this video:

YouTube Preview Image

As of the writing of this article, it has just over 1250 views.

The real clue to Groupon’s lack of effort or understanding came with Black Friday and Cyber Monday. Competitor Living Social pulled out all stops to gain attention on the most important 4-day shopping weekend of the year. Groupon’s offerings were feeble by comparison.

Living Social Cyber Monday

If Groupon is going to succeed, they cannot continue playing the role of the big kid on their block. They’re in a different arena now with investors to appease and analysts to impress. CEO Andrew Mason’s net worth has dropped nearly $600 million since the IPO. Will that be enough to get his attention, or will Groupon continue to flounder on the ticker and fail in their media relations?

Written by Scarlett Madison

+Scarlett Madison is a mom and a friend. She blogs for a living at Social News Watch but really prefers to read more than write. Find her on Twitter, Facebook, and Pinterest.
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Comments
  • http://www.facebook.com/people/Bob-Roberts/100003114080041 Bob Roberts

    If you invested in Groupon and want to lose more money – invest in Facebook!

    • Lupo Sling

      An IPO is a unique market play that requires superb timing.  Absent that, the most dramatic lift-off inevitably fizzles out and like a spent roman candle it returns to earth. Aside from timing it requires not only a well prepared PR campaign (which it had) but a coherent customer recruitment strategy that results in rapid growth among its target audience (which it had not!).  

      The so-called “launch” is itself a common, quaint and overrated exercise, a left-over ritual from the earliest days of gadget advertising promoting new product after new product in the effort to build on buzz and sustained by brand acceptance among customers.  Launches are more a statement of optimism and more often justified by  available budgets than by coherent appeal to prospective buyers. Unless managed by hands as capable of Steve Jobs whose products’ brand led the market in ease-of-use and other critical attributes, the conventional launch today is an ineffective plodding reflex, a nostalgic indulgence of old form, not the sleek, compelling execution that capitalizes on customer-to-prospect buzz as practiced by all the winners in today’s online marketplace.In any case, Groupon’s pre-IPO success and rapid rise was not achieved by a big splash launch but through surging performance via the systematic recruitment of online customers, an approach it sidelined in the hubub surrounding its ill-timed rush into the bourse. The share price’s rapid decline illustrates the dual failures of poor timing and favoring PR over the dogged slog of customer recruitment.

  • http://twitter.com/0boy JD Rucker

    Damn it, Reddit. Why didn’t you tell me Monday?

  • http://profiles.google.com/evancharlton Evan Charlton

    I tried to watch that video and it was horrible. Poor quality, shaky camera work, astoundingly boring, and about four minutes too long.

  • Anonymous

    damn. wow.

  • http://fadi.el-eter.com Fadi El-Eter

    The worst is yet to come for Groupon’s investors, they’ve all been suckered into buying this stock thinking that it will perform like LinkedIn, at least for the first couple of months.

    I have discussed before on how much Groupon is worth, and i have concluded that in a few years, it will be worth nothing: Google, Apple, and Facebook will kill it by then.