Advertise here with Carbon Ads

This site is made possible by member support. โค๏ธ

Big thanks to Arcustech for hosting the site and offering amazing tech support.

When you buy through links on kottke.org, I may earn an affiliate commission. Thanks for supporting the site!

kottke.org. home of fine hypertext products since 1998.

๐Ÿ”  ๐Ÿ’€  ๐Ÿ“ธ  ๐Ÿ˜ญ  ๐Ÿ•ณ๏ธ  ๐Ÿค   ๐ŸŽฌ  ๐Ÿฅ”

The Groupon IPO

I don’t really have an opinion about it, but David Heinemeier Hansson does:

Groupon has filed its S-1 and hopes to raise $750M in its initial public offering. Given they’re currently losing a staggering $117M per quarter, despite revenues of $644M, they’ll be burning through that cash almost as soon as it hits their account.

At the moment, it’s costing them $1.43 to make $1, and it doesn’t look like it’s getting any cheaper. They’re already projected to make close to three billion dollars in revenues this year. If you can’t figure out how to make money on three billion in revenue, when exactly will the profit magic be found? Ten billion? Fifty billion?

To which John Gruber adds:

I feel like the Groupon IPO is an elaborate practical joke.

It was a different time and (as DHH notes) a different company, but when Amazon IPOed in 1997, they lost $27.6 million that year on net sales of $147.8 million. That’s an 18% loss for Amazon compared to Groupon’s, hey, 18% loss. Amazon didn’t report their first profit until Q4 2001. No guarantee whether Groupon will ever turn a profit but something to consider anyway. Oh, and probably not relevant but interesting nonetheless: Amazon CEO Jeff Bezos is an investor in DHH’s company, 37signals…and until recently, 37signals co-founder Jason Fried was on Groupon’s board of directors.