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by jasonrr 5182 days ago
Simply stating it is not a ponzi scheme doesn't advance the conversation in a meaningful way in my opinion.

It's really just semantics at this point. There is a lot of evidence here that suggests systematic misleading (if not out-right defrauding) of investors. So you while you are technically correct, I think what Groupon has done is in the spirit of Ponzi even if it is executed differently. What's happened here is more than just a bad business plan executed honestly producing poor results. Just because we don't have the exact word for it doesn't make it any more ethical.
2 comments
Quizzy 5182 days ago
Jason, your gut instinct is correct. Groupon is a Ponzi scheme in every way: last customer in gets no money out. I feel sorry for that Mom & Pop pizza that paid $1,000 to run a Groupon deal, and expecting $300 back in 60 days, only to see Groupon go belly up and get nothing but a letter that says "Please send your creditor claim to the bankruptcy trustee listed below".
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pbreit 5182 days ago
It's not a ponzi scheme.

Groupon only pays out about 45% of gross bookings. Ponzis generally pay out closer to 100%. Once it brings sales and marketing to a reasonable level it should be wildly profitable.

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