Even objectively speaking, at least for the moment, Groupon's party is over. After an impressive initial climb from $20, the group-buying company's stock edged ever closer to $30, but as of press time it's at $17.01. Yes. That means it's slid to beneath its opening asking price.
So. What the heck happened?
There are a couple of prevailing theories. Seeking Alpha has a rather harsh perspective: "The stock is grossly overvalued by any valuation metric and other than a subscriber base, the company really has no long term competitive advantage."
Maybe so, but that's hardly news. Groupon has, of course, inspired a countless rising tide of wannabes and imitators -- which have widely been called "Groupon clones." Groupon going public doesn't change any of that, so it's likely there are other factors at play here as well.
One thing that springs to mind is the disquieting frequency with which Groupon is connected with some sort of deal that, in hindsight, probably shouldn't have been offered in the first place. There's a long laundry list of these at this point -- which is sort of the, uh, point -- that we won't rehash here.
But the latest comes from across the pond: The Guardian is reporting that an ad "pressuring" Groupon customers into "hurried cosmetic surgery" has been banned by the Advertising Standards Authority. There was a deal in Groupon Manchster offering "₤1,999 Instead of ₤5,000 for Cosmetic Surgery Such as Breast Augmentation and Rhinoplasty at Birkdale Clinic." Even if it wasn't banned, it still sounds like the same sort of joke like the phony story floating around a few weeks ago about Groupon offering deep discounts on medicinal marijuana.
That's kinda the problem, though, isn't it? It's getting hard to sort out what Groupon is actually doing from what it isn't these days.
Reuters predicts the stock's substantial fall is due to investor concern over increased competition. But at this point, anyone's guess seems to have some merit.