If the purpose of a business is to generate profit for its owners (investors), then the only business Groupon has successfully operated to this point has been a ponzi scheme.
Just because it's common doesn't mean it's not a ponzi scheme. It's just a ponzi scheme in a pretty dress. I'd be willing to go further and say it's just as bad because if you read their S1 and their made up accounting "principles," they're actually attempting to deliberately mislead people into thinking the business is in a much better state than it really is.
Again, it may be possible to transform Groupon into a legitimate business going forward; however, to this point, it's been anything but that.
Really? That's what you concluded from reading my comments? I'm almost tempted to call "troll" and not respond; but against my better judgment, I'll bite.
Any business that does not generate profit is NOT a ponzi scheme and I did not even begin to imply that was the case. Any business which pays out dividends to their investors based ONLY on money secured from later investors is operating a de facto ponzi scheme.
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It's fine for early business to operate at a loss; it's not ok for an early business to funnel money to early investors while still operating at a loss.
fwiw, I upvoted both of your comments. I think it's obvious this is a difficult subject based on how many intelligent people disagree on it. I very strongly disagree with your conclusion, but I respect it and disagree with the downvotes.
Totally fair to disagree. I've enjoyed the discussion. It's forced me to re-evaluate my thinking on the topic. While I still think there are strong elements of a ponzi scheme at work here and that there truly is a de facto ponzi scheme; Groupon doesn't really qualify as an de jure ponzi scheme.
That said; what's more important than the vocabulary is understanding the total lack of ethics happening here--and the fact that (unlike the early investors who are now going to make their big bucks) the general public who are foolish enough to buy into Groupon will likely never see that investment returned and the only reason the early investors will get money is the investment capital from the IPO will be funneled to them.
Just because it's common doesn't mean it's not a ponzi scheme. It's just a ponzi scheme in a pretty dress. I'd be willing to go further and say it's just as bad because if you read their S1 and their made up accounting "principles," they're actually attempting to deliberately mislead people into thinking the business is in a much better state than it really is.
Again, it may be possible to transform Groupon into a legitimate business going forward; however, to this point, it's been anything but that.