Groupon Now Down 78% From Its November IPO Price

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The daily deals site has verifiably tanked on Wall Street.

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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.
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Alexis C. Madrigal

Alexis Madrigal is the deputy editor of TheAtlantic.com. He's the author of Powering the Dream: The History and Promise of Green Technology. More

The New York Observer has called Madrigal "for all intents and purposes, the perfect modern reporter." He co-founded Longshot magazine, a high-speed media experiment that garnered attention from The New York Times, The Wall Street Journal, and the BBC. While at Wired.com, he built Wired Science into one of the most popular blogs in the world. The site was nominated for best magazine blog by the MPA and best science website in the 2009 Webby Awards. He also co-founded Haiti ReWired, a groundbreaking community dedicated to the discussion of technology, infrastructure, and the future of Haiti.

He's spoken at Stanford, CalTech, Berkeley, SXSW, E3, and the National Renewable Energy Laboratory, and his writing was anthologized in Best Technology Writing 2010 (Yale University Press).

Madrigal is a visiting scholar at the University of California at Berkeley's Office for the History of Science and Technology. Born in Mexico City, he grew up in the exurbs north of Portland, Oregon, and now lives in Oakland.

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