BargainValueHunter Posted August 22, 2012 Share Posted August 22, 2012 Amazon $8 in 2001...$239 today. Priceline $10 in 2001...$585 today. With a few of today's Web 2.0 "Social Media" stocks history may be rhyming... Groupon, for example, has ~$780 million in shareholder's equity and no debt but is being kicked hard to the curb. There will be some brand equity built up here and the winners in this space will still be around in ten years. Off the wall? Link to comment Share on other sites More sharing options...
NormR Posted August 22, 2012 Share Posted August 22, 2012 A difference in the quality of management and it isn't clear how much repeat business they get. Link to comment Share on other sites More sharing options...
keerthiprasad Posted August 22, 2012 Share Posted August 22, 2012 Amazon has great management and the ability to continuously invest in new ideas. Priceline's future didn't seem so certain for several years (may ups and downs if I recall correctly). Link to comment Share on other sites More sharing options...
stahleyp Posted August 22, 2012 Share Posted August 22, 2012 But the environment was totally different. All things tech were being crushed this. These days, it's not nearly as rampant. Link to comment Share on other sites More sharing options...
bookie71 Posted August 22, 2012 Share Posted August 22, 2012 Groupondoesn't haveamoat. The local paper, a tv station and a local coupon magazine have all replaced groupon in our area. They (Groupon) are trying to reinvent themselves by "helping" local non profits. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted August 22, 2012 Author Share Posted August 22, 2012 Groupondoesn't haveamoat. The local paper, a tv station and a local coupon magazine have all replaced groupon in our area. They (Groupon) are trying to reinvent themselves by "helping" local non profits. Groupon doesn't have a moat but what did people think of Priceline's moat in 2001 or even Amazon's moat? At what price does Groupon become a "value" or can it never have any value if it doesn't have a moat? Wouldn't that eliminate all newer Internet stocks that may build a moat when value investors aren't looking? Link to comment Share on other sites More sharing options...
DCG Posted August 22, 2012 Share Posted August 22, 2012 The local paper, a tv station and a local coupon magazine have all replaced groupon in our area. Same here. Link to comment Share on other sites More sharing options...
Ross812 Posted August 22, 2012 Share Posted August 22, 2012 Groupondoesn't haveamoat. The local paper, a tv station and a local coupon magazine have all replaced groupon in our area. They (Groupon) are trying to reinvent themselves by "helping" local non profits. Groupon doesn't have a moat but what did people think of Priceline's moat in 2001 or even Amazon's moat? At what price does Groupon become a "value" or can it never have any value if it doesn't have a moat? Wouldn't that eliminate all newer Internet stocks that may build a moat when value investors aren't looking? Without a moat it is impossible to predict the future cash flow the company will produce. Will Groupon build a moat and become the next Priceline? It could, but that is speculation. What is it worth? I have no idea. It has a 3B market cap right now. How much would Google or another competitor have to spend displace Groupon? I'd bet much less than 3B. Link to comment Share on other sites More sharing options...
NormR Posted August 22, 2012 Share Posted August 22, 2012 http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/742 Dig a bit and you'll find more. Hint: take a look at the past history of management. Link to comment Share on other sites More sharing options...
BargainValueHunter Posted August 23, 2012 Author Share Posted August 23, 2012 http://blogs.smeal.psu.edu/grumpyoldaccountants/archives/742 Dig a bit and you'll find more. Hint: take a look at the past history of management. O.K., I guess I shouldn't have used a fraudlent enterprise like Groupon as an example. But the greater question is then are social media Internet stocks (or any tech stock without a very wide moat) a permanent no man's land for "Prem Watsa" style value investors or could, one day, a company in this space be worth a look based on stock price vs. cash and current free cash flow? Link to comment Share on other sites More sharing options...
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