It's strange that Groupon's IPO is being covered in the media more like a cop working a crime scene than what it really is: a company just going public. Still, some intriguing evidence is coming out about investors' actions.
It's common knowledge that stocks are likely to plummet before they soar, but after a strong initial showing, Groupon is definitely in the downward trend still. In fact, Business Insider is suggesting confidence in the IPO is discouragingly low: "Almost two-thirds of the people who bought and sold the company's stock [the first day] lost money. The average return was -3.3%"
And people weren't shy about ditching the stock. From the same story: "Over a fifth of people who bought GRPN on the day it IPO'd dumped the stock that same day."
Right now GRPN is at $23.81. We don't have to tell you: That's lower than it was yesterday. True, it could turn around tomorrow, but some skeptics are saying the Groupon model has yet to even prove itself as sustainable or even lucrative in the long-term.
Robert Wheeler, a fellow at Harvard Business School's Forum for Growth and Innovation is one such skeptic, but he's at least tempered and measured in his criticism: "Its traditional daily deals business is looking less and less appealing at scale as we learn more and more about what the economics of the market look like at maturity. The company is experimenting with numerous other products... but the absence of entry barriers, the feverish competition, and uncertainty regarding the ultimate success of any of Groupon's initiatives give me pause."
Meanwhile, Business Insider also already has a piece on how long you should hold on to Groupon stock, if you managed to nab some. The advice isn't encouraging.
But again, things could still turn around for Groupon. You never know.