<story><title>Groupon is Effectively Insolvent</title><url>http://m.minyanville.com/?guid=34936&amp;catid=4</url></story><parent_chain></parent_chain><comment><author>pkaler</author><text>The word &quot;effectively&quot; in the title is a weasel word.&lt;p&gt;Groupon is balance sheet insolvent by definition.  Their liabilities are greater than assets.&lt;p&gt;Groupon is cash flow solvent by definition.  They are able to pay liabilities NET60.&lt;p&gt;In Q2-Q4 2010, Groupon had $669mm with a net loss of $398mm.  That is a ratio of about -0.59.  In Q1 2011, Groupon had revenue of $644mm with a net loss of $102mm.  That is a ratio of about -0.16.&lt;p&gt;If you are long Groupon, then you are betting that -0.16 approaches zero and then turns positive.&lt;p&gt;The moral of the story is:  haters gonna hate.</text></comment>
<story><title>Groupon is Effectively Insolvent</title><url>http://m.minyanville.com/?guid=34936&amp;catid=4</url></story><parent_chain></parent_chain><comment><author>wccrawford</author><text>They&apos;re trading that temporary debt for hypergrowth, as the article says.&lt;p&gt;&quot;For the remainder of the year they had $669 million in revenue (simply staggering), but had a net loss attributable to Groupon of $398 million. This year, Q1 results showed revenue growth continuing to soar, with revenues of $644 million, but a net loss attributable to Groupon of $102 million.&quot;&lt;p&gt;So the time periods were different, but the revenues were the same.  They went from losing $400mil to only losing $100mil...   That sounds to me like they are getting close to being profitable again...  And in a very short timeframe.&lt;p&gt;As for it being like a Ponzi scheme, it&apos;s not.  Ponzi relied on lying to the investors and telling them the money came from good investments.  It wasn&apos;t sustainable, and nothing could fix it.  Groupon is sustainable and hasn&apos;t lied (that I know of) to their investors, new or old.  It doesn&apos;t even need fixing as it looks like it&apos;s already on the fast-track to profit, based on the numbers provided.</text></comment>