By Christina Kostopoulou
There has been talk on Wall Street about a possible IPO of Chrysler. All the while some people think that the news of job losses potential is vastly overstated. They think that is a joke to say that 2 million jobs are at stake when the industry itself employed around 900,000 and WallMart alone employs 2 million! So why are we worried about one U.S. carmaker?
What about the point : couldn’t just file for bankruptcy? File for chapter 11 and walk their way through it? Of course the opportunity of success would be very low. If the U.S. taxpayers hadn’t taken the $ 1.3 billion loss, the consequences would have been significantly worse. But that assumes that once pressure shuts down, no one would have come in and bought it. No one would have done something about it. Of course it would. This is why capitalism works. Someone will always step in and try to create new leverage on the remains of something else.
Another IPO is that of Groupon, a technology company that issues online coupons. What opportunists! They wasted no time at all. After LinkedIn’s entry, Groupon doesn’t want to wait. LinkedIn’s success is based mostly on that offers a way to public investors in regular markets to be able to invest in a real social network company. Groupon comes right away with the same philosophy. Groupon is a company with a decent kind of revenue but also with no profit. It delivers daily discounts on hotels, restaurants and other goods and services to 83.1 million subscribers. The daily-deal market pioneered by Groupon may generate $ 3.9 billion in US sales in 2015 from $873 million in 2010, according to a recent research. To handle the growth, Groupon bolstered its workforce to 7,107 employees as of 37 in June 2009!
The revenue on the first quarter was almost 750 million, whereas LinkedIn was around only $ 100 million! But then a loss came of about $ 100 million for Groupon and a warning that said the losses are going to grow significantly at the foreseeable future. LinkedIn is still trading at nearly $ 75. Well, we can’t be really happy if we compare it to the $104 on its first day. The argument to either love the idea of Groupon going public or better let go is how many Americans are using groupons online? What portion of the population? And should we assume that one day everybody in this country will be using electronic coupons? It all depends on the expectations the public have but more importantly on competition that may or may not develop in the industry.
