NEW YORK (CNNMoney) -- Shares of daily deals site Groupon closed at $26.11, roughly 31% above their initial offering price in the public debut of the stock on Friday.
Groupon (GRPN) had priced its initial public offering at $20 a share late Thursday, the last step on a rocky journey to its debut. Under the ticker GRPN, Groupon began trading Friday at about 10:45 a.m. ET on the Nasdaq stock exchange, and opened at $28, 40% above the target.
Common Sense has commented from time to time on the foolishness of the stock market. Here's yet another example. Don't misunderstand, Groupon is OK. In fact Common Sense has used the service from time to time. What Common Sense doesn't understand though is how an internet company that has never made money, that has an intermediary business model that provides no value add, with very low barriers to entry, and competitors including Google and Amazon could possibly be worth $30 billion! Common sense has clearly left the trading floor!
Of course, this kind of foolishness is nothing new and in the larger scheme not all that unusual.
Common Sense is mindful of several recent proposals by candidates who would be president to privatize social security by allowing some workers to invest in a stock market that values a company that has never made money, has a doubtful business proposition, and has strong competitors at $30 billion. Common sense clearly need not be part of presidential campaign proposals.
Common Sense also notes that it was foolishness of this sort that lead to the collapse of the real estate market. Perhaps we shouldn't repeat that experience.
No comments:
Post a Comment