Hacker News new | past | comments | ask | show | jobs | submit login

I can agree that the market is over-valuing coupons.com, but not with the overall emphasis on past profits in IPOs. "But they're losing money and hugely over-valued!" is a sentiment I hear a lot from traders and observers who deal in established companies, but it may or may not apply to IPOs and new companies.

Coupons.com has been around for a long time (1998), and if it hasn't figured out a way to be profitable in 15 years I don't think a cash infusion is going to help. I don't see any evidence of a new product or service or a new revenue stream. In fact I'd bet against coupons.com growing as users become weary (for the non-technical) and wary (places like HN) of additional browser addons.

COUP aside, sometimes it's wise to ignore profits in an IPO. Emerging markets, new technologies, and early-stage high-growth startups are good examples.

For example, Tesla lost over 55 million the year before its IPO.[1] Some said the shares were too high, but it paid off[2] for those who saw the potential. Musk pointed this out himself:

"A lot of people were puzzled about why we were going public without profits,” Musk told reporters outside the Nasdaq building in Times Square. “The reason we are not profitable today is because we are in the midst of expanding with the Model S."

New product, new market, growing company. Check. Proven management team with realistic expectations and a strong proof-of-concept? Check.

In Tesla's case it makes sense to ignore past losses and bet on the long play. While coupons.com could become profitable, I'll be shocked if the premium paid on this IPO pays off.

[1] http://www.wired.com/autopia/2010/06/tesla-ipo-raises-226-1-... [2] https://www.google.com/finance?q=tesla




I really don't think that it's fair to compare Tesla with Coupons.com. Tesla has net assets of $2.4 billion, with IP that's worth a considerable amount. This is evidence to show that it may be worth investing. What does coupons.com have? A failing 16 year old business that hasn't once turned a profit?

Edit: Just noticed you said COUP aside. I agree with you – the comparisons from tech or unprofitable IPOs don't add up.


TSLA, FB, AMZN &etc are still all being >80% valuated on potential. We can quibble about whether COUP deserves to be be given the honor of having that valuation model, but the fact is that the world doesn't have a great standard model for how much a bird in the bush should be worth relative to one in your hand, but the markets seem to be pricing in one-to-one for some of these growth stocks.


The real litmus test is whether high-growth companies' revenue-exceeding expenditure has mostly been invested in developing a unique product that should be a cash cow in future (Tesla R&D) or in acquiring customers which tend not to have a reason to stick around (Groupon)




Consider applying for YC's Fall 2025 batch! Applications are open till Aug 4

Guidelines | FAQ | Lists | API | Security | Legal | Apply to YC | Contact

Search: