The daily deals site has verifiably tanked on Wall Street.
Groupon CEO Andrew Mason, perhaps on his way to the bank (Reuters).
Yikes, after Groupon reported its second-quarter revenues, the company's shares have nosedived in after-hours trading. As I write, the share price is down to $6.15, or 78 percent off from its IPO price of $28.
Of course, Groupon insiders have already cashed more than $800 million out of the company
, so perhaps they aren't so worried about the company's current performance.
It is perhaps unfair, however, to group Groupon in with Zynga and Facebook. The business model looks a lot more like a traditional offline business, sort of like a yellow pages with a teensy-weensy bit of social added to the mix. The name of the game is selling thousands and thousands of local merchants on the idea that a breakeven or loss-leader promotion will lead to the long-term improvement of their businesses. That's always been a risky venture.