Friday, November 4, 2011

Groupon Now Groupoff Later?

An article on talks about the IPO for the company Groupon in an article titled "Groupon IPO Pops 40% On Open". They talk about the price of the stock sold for compared to what was expected as well as how much it made.  "Groupon opened on the public markets Friday at $28, popping 40% from its initial pricing of $20," states the article.  But what risks are involved in investing in the internet booming business of group coupons?  The article states, "Investors are shrugging off any concern about Groupon’s business model and prospects."  Shrugging off any concern?  Yes this is a booming internet company but for how long.  The IPO was great up 40% from what they were expecting however the company but the company's capital was only $17.8 billion not the $25 to $30 billion they had been talking about. 

With the economy in, or in some people's opinion coming out of, a recession there is a big push for saving money.  Groupon started and has survived because of this.  When, or if, the economy comes out of this recession will people still keep the save save save mentality?  Or will they go back to the "I want it now" mentality and pay whatever to have a product or service immediately.  If this happens what will happen to sites like Groupon?  Only time will tell.

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