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Friends, countrymen, degenerates — lend me your tickers.
Groupon is not dead. I know. I had filed the obituary, sent flowers, eaten the little sandwiches. Then the deceased sat up on the slab and asked what was for dessert.
The bear case comes in four flavors. Let us taste them.
Flavor one: melting ice cube.
North American local billings: +11, +20, +18, +9 on the year. That is not a melting ice cube. That is an ice cube doing calisthenics. A business pronounced dead five years running and growing revenue in the sixth has, at minimum, stopped cooperating with the coroner.
Flavor two: no capital to return.
Tell that to the $245 million buyback gathering cobwebs in the safe — on a market cap south of half a billion. A buyback that size against a company that size is not a capital return plan. It is a loaded question.
Flavor three: no hidden value.
In the corner, like a forgotten umbrella, sits a 1.79% stake in SumUp — a European payments house whispered at $10 billion. If they file, the umbrella is suddenly worth $179 million, and Groupon does not have to lift a pinky. The market will reprice it, gratis, out of good manners.
Flavor four: management asleep, or fleecing you, or both.
The CEO, a Czech gentleman named Senkypl, paid $11.30 of his own coin for 3.1 million shares seventeen months ago, and carries PSU strikes topping out at $82. A man does not set his own watch to $82 if he’s planning to sell the factory at $9.
A word on the honorable opposition.
Lauren Balik shorted this thing at $33 and rode it to $12. That is winning the trade, and I will not pretend otherwise.
But her GLP-1 piece leans on a $28 million category shift to explain $97 million of North American local growth — arithmetic Goldman would circle with a red pen. Health and Wellness, the category she says is propping the thing up, has been declining three straight quarters. Her Microsoft piece finds $3.66M of bootleg Office across five vendors — a rounding error on $1.67B of billings. The SharePoint follow-up is a regulatory story in a fundamentals costume, and the regulator has been at brunch for a year.
None of it mentions the buyback, the CEO’s $11.30 check, or the SumUp umbrella. Balik is a good writer. She found some bad ads. You do not take a company to zero by complaining about the wallpaper.
Goldman is at SELL, ten-dollar target. Goldman is not wrong, exactly. Goldman is paid to be right at the pace of Goldman, which is the pace at which glaciers used to move before the climate got involved.
A bear who has outlived his thesis is a man who has confused the long run with the short run, and will be introduced to the difference on a Tuesday he did not put on his calendar.
None of this is advice. I am one more fool on the internet with a keyboard and a theory. But if you’ve been waiting for the tableau where the operator has paid up for his own stock, the buyback is bigger than the company’s shadow, a payments IPO sits free in the corner, and the tape still trades the name like it’s 2019 and Andrew Mason is about to drop a concept album — this is, roughly, that tableau.
— Position: long shares, some May calls. Not your buddy, not your advisor, not your priest.