The problem with Groupon
Groupon has yet to carve out a competitive niche for itself in the market, and it never should have been a multi-billion dollar company.
Groupon has yet to carve out a competitive niche for itself in the market, and it never should have been a multi-billion dollar company.
Regular readers know I've been hating on Groupon ($GRPN) since before the IPO, I made it pretty clear that I was not a fan of the model or the opportunity for a daily deals stock.聽 I had some great intel from merchants who used the service and salespeople from competitors about why this should never have been a multi-billion dollar company.
Morningstar put out a piece of research on the stock this morning that I thought cut right to the heart of the matter - the barriers for competition are effectively zero...
The rest of the report concerns valuation and "weak economies of scale.聽 It's behind a paywall at Morningstar but if you want to sign up for Morningstar StockInvestor, it's $109 for the year (12 issues).