Turn the clock back twelve years. The NASDAQ was approaching all time highs. Stocks such as North Point Communications, Global Crossings, XO Communications were trading at more than a billion times earnings. They were great ideas but translation into profit would never happen.
Is Groupon going to follow that tradition?
Let’s bring Wal-Mart to the public. Group all orders for merchants into a wholesale pot and allow everyone to participate. The business model worked great for discounters and with no brick and mortar costs it would be a no brainer.
It is the classic dot.com model, forget profits, build the sales and the profits will come.
On Wednesday the company posted its first numbers since the IPO and they were not welcomed. Sales more than doubled to over $500 million in the fourth quarter, led by sales in the holiday market, but the company still has not made dollar one.
Have we seen this before?
Continue to lose money today for the big profit next year.
The reasons given were the usual.
The taxes were higher than expected.
Marketing expenses declined as predicted, but we continue to learn about our clients.
Accounting issues shifted expenses to the fourth quarter.
Every possible excuse has been given since the company went public in November. On Wednesday major stock holders said enough and the stock got slammed, down more than 15%.
So will Groupon be the next Microsoft or the next Doggie.com? Should I buy Groupon or move on?
The market will give us those answers.
That is what I teach my students, how to have the discipline to take any market problem and turn it into an opportunity.
My method will work in any market condition.
That is what I teach and I can educate you too.
To learn firsthand how I would trade the opportunity that highly speculative stocks like Groupon can offer, speak to one of my representatives and sign up to work one-on-one with me here:
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As Always,
Keep those stops tight.
Todd “Bubba” Horwitz
P.S. We run the fastest growing online options community. With weekly webinars and a very energetic forum, my team and I are always looking for great risk/reward opportunities. Click on the link below and become a member of my community today.
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