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Technology Stocks : Groupon, Inc.
GRPN 21.57+7.2%Nov 3 3:59 PM EST
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To: Ryan Bartholomew who wrote (401)2/24/2014 12:15:43 PM
From: The Ox1 Recommendation

Recommended By
zax

  Read Replies (1) of 480
 
No, not completely. I look at both the chart and the underlying fundamentals. I think there are very large markets for GRPN's different product lines.

Their base model, the "groupon" is so very different than a coupon. The "cash up front" nature of this model is where they can build support via the companies who supply them. The hard part for the "newbie" GRPN user is getting over the fact you have to pay up front for the discount. Once that issue is understood and the fear is overcome, GRPN's users tend to use it more and more.

One of the key elements of this service is for the business who's offering a discount to build a relationship with the customer using it. If the business is a restaurant and they reduce portions or service because the person has a discounted meal, well that's a failure of the business. If they understand that this one meal is a "loss leader", in the same context as a grocery store who sells milk below their cost to attract customers, then they'll do better, IMO.

As to "competing with AMZN", it's my opinion that it's way too early in the process to see it this way. Yes, they must create distribution facilities and build the proper management infrastructure for their product to be viable. This is true of any business...

I appreciate your skepticism but I think you've been off base on how to view companies like this one. Certainly, you have missed the last 30 or 40 points in FB by not believing in their approach. I have to wonder if you aren't missing the boat here with GRPN as well!!
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