[raganwald]

I know what the author is trying to say, but the way it's being said doesn't resonate with me. GRPN may fall to half its IPO price, but it won't be a half price deal, it will simply be worth less today than it was at IPO time.

The markets for stocks behave very differently than the markets for, say, spa treatments, in large part because nobody has commoditized spa treatments. Buying a spa treatment for half off doesn't say something about the market valuing it differently today than yesterday, it says something about the spa's marginal cost of offering a treatment during an idle time slot and price discrimination.

Whereas, GRPN's price says something about market segmentation alone: The folks who bought the hype have all bought the stock and now it will trade according to the expectations of the rest of the market.

[georgeriths]

I think the point the author is making is more about the irony of the "idea" rather than the actual price of the stock... but that's just me.

[raganwald]

I know, I know, but I couldn't resist the opportunity to explore the ideas of how the markets differ. As for kicking them while they're down, given that the founders have already walked away with the money, the people getting "punished" are employees and the sucker investors who bought the story.

People will probably call for stricter lockup periods, but as long as investment banks and VCs are allowed to get rich flipping IPOs, this sort of thing is going to keep happening. These founders were just ruthless enough to get themselves a seat at the dinner table instead of being the servants ladling out the soup.