[danteembermage]

Groupon has lots of debt, just not the long-term kind. Why is having debt due sooner somehow better? For reference check out this http://www.sec.gov/cgi-bin/viewer?action=view&cik=1490281&ac... their current assets and current liabilities are about the same, with cash and what they owe their merchants about the same too.

That said, I always teach Groupon as the quintessential example of the power of having a negative payables cycle. They don't deserve any laughter for the growth engine they created; whether the business itself is sustainable is still an open question, but I'd say the same thing about GM so that comment doesn't really count as derision.

[cperciva]

I always teach Groupon as the quintessential example of the power of having a negative payables cycle.

I thought Amazon was the example everybody always used.

[dudurocha]

I think Amazon is quite the opposite, no? I'm really curious...

Groupon receives the money then pays the owners in 30 days. Amazon does not have to pay its suppliers before and sell and receives money after?

[cperciva]

When Amazon launched, the standard contracts between publishers and bookstores had the stores paying 60 days after books were shipped to them. This made sense for conventional bookstores which would often have books on their shelves for months before selling them; but Amazon typically turned over their inventory every 30 days, meaning that -- even after the inevitable delay between charging a credit card and getting the money -- they received payment for books on average 2-3 weeks before they had to pay their suppliers. A lot of Amazon's early growth was funded by this negative working capital requirement.

Now that Amazon has expanded from books into CDs and DVDs and electronics and clothing and toys and food and computing services, of course, it's quite possible that their cash flow picture is very different.