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Peak Groupon

"There are no real barriers to entry, but there are fairly significant barriers to success."

Jordan Rohan, an analyst with Stifel Nicolaus.

Covers about 18 Internet/Media companies.

Yes, there were warnings signs that Groupon wasn't Google. For an Internet company, Groupon relied on considerable labor and marketing costs, which it needed to create and maintain its deals. But there was still reason to think that online coupons were a decent idea whose time had come; that using discounts to let companies more effectively manage their inventory represented real innovation; and that a company whose revenue grew 22X in one year simply had to be superlative at something.

Well, investors are saying so much for that, as big names like Marc Andreessen are dumping the stock, even after it's lost 75% of its peak value. In other words, they are saying: At 20% of the IPO market cap, Groupon still isn't the right price to hold.*

The Wall Street Journal, splashing the Groupon story at the top of its Monday newspaper, declared: "Backers Retreat From Young Internet Firms That Haven't Lived Up to Hopes."

"I once got a Groupon for teeth whitening," one person wrote. "I went to the office and the receptionist gave me some bleach and told me to do it at home. She said it would be extra if I wanted the dentist to do it."

Jordan Rohan joined the Stifel Nicolaus Research Team in connection with Stifel's acquisition of Thomas Weisel Partners LLC in July 2010. Mr. Rohan is a Managing Director and senior analyst covering the Internet Services sector. His coverage includes all aspects of the Internet, including search, online advertising, e-Commerce, lead generation, and online marketing services. Mr. Rohan was named a top stock Picker by the Wall Street Journal in both 2005 and 2007 and has developed a reputation for bold, non-consensus stock calls. From 1999 through 2008, he held similar positions in equity research at Soundview and RBC Capital Markets. Before coming to Wall Street, Mr. Rohan began his career in 1993 with The Walt Disney Company as a Business Development analyst. He earned his undergraduate degree from The Wharton School at the University of Pennsylvania and his M.B.A. from Stanford University


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