The Groupon Rorschach TestDuncan Davidson - Monday, June 20th,
2011  Valley People poured over the Groupon IPO filing like the
NYT over Palin emails, looking for clues. They saw what they
wanted to see. It ranged from “Ponzi Scheme!” and “Swindle!” to
the ironically witless “no, it’s like Amazon and other dot-
coms.” They meant to justify Groupon because Amazon ran years of
losses before become a great franchise; but they instead raised
the spectre of the “B Word”: a dot-com bubble stock.  Of course,
Groupon is not really like Amazon: while it has much more
revenue ($700M vs. $16M), a bigger user base (50M vs 35M),
raised a boatload more capital ($750M vs. $55M) and a much
higher expected IPO valuation (see table), it also has a much
bigger loss: $400M on $700M of revenue. It not financing
inventory risk but customer acquisition, a less tangible outcome
than Amazon. And when Zynga goes out, it may show a gain of
$400M on slightly higher revenue. Which deal would you rather
own?   Also, those stunning reported