Puts on Angies List and Groupon

[minsco]

Soo... I'm thinking of buying some waaay out of the money long term puts on GRPN, which are available right now, and doing the same for ANGI.... This isn't a trading forum, but whatever...

I'm almost positive these companies are going out of business, or will decline heavily in the next 1 and 1/2 years... So I think I can make some vacation cash here.

What say you of wickedfire?

 

[tavin]

Seems pretty obvious..

 

[Gambit]

Angie's List is shit. A paid service that Yelp is already doing better for free? And Angie's List has already been caught giving bogus reviews. My only concern is their target market might just be people just enough not to know better.

It's just a matter of time before businesses stop wanting to work with Groupon. And customers don't even want to check their emails anymore. The founders have already cashed out, and I believe they have been running at a loss or near loss trying to expand their market.

I think it's a good idea. I've been thinking about doing this also, but I don't really have money to invest right now.

 

[Cut]

Soo... I'm thinking of buying some waaay out of the money long term puts on GRPN, which are available right now, and doing the same for ANGI.... This isn't a trading forum, but whatever...

I'm almost positive these companies are going out of business, or will decline heavily in the next 1 and 1/2 years... So I think I can make some vacation cash here.

What say you of wickedfire?

I'm trying to figure out why you would do that. I do agree that the business model isn't sustainable for many years but your strategy doesn't make much sense.

Let's say you buy OTM puts for Groupon @ Jan 14 $5 Strike

You have a little under two year's to be right. That they will be worth nothing.

Now the bid/ask spread is going to kill you. Right now you will pay $1.25 per share to get that put. With the bid being $1. So you lost 20% instantly when you buy those puts. Let's just say the company goes bankrupt blah blah blah. So you can sell the shares @ $5 a piece or sell the options back into the market. So let's just assume the value of the options are $5.

Which would be a 400% ROI. Now is it really worth it to bet money on something that you think will fail in two years when it probably won't. The company would have to go belly up to see any real profit. Meanwhile you can easily return 400% doing other things. Hell you could cover call Groupon every month and get close to that. If you make 5% a month compounded over two years without getting called away. But if you really think it's going to go down.

Better just sell naked calls, but if you lose all your money don't blame me.

 

[tspesh]

I wouldn't bet on it, they are at the forefront of the technological revolution still going on, where else is the growth in the economy, may I ask then? All that computing program can massively change the audience online rather rapidly.

I can't speak on Angies list, but Google is going to crush groupon like the little bitches they are.

 

[ly2 from WF]

I can't speak on Angies list, but Google is going to crush groupon like the little bitches they are.

With what? Hootpot or whatever the fuck it's called? Google's track record for crushing shit isn't so hot.

Youtube
Adsense/Adwords
Search
Gmail

Help me out here...what else do they have that isn't shit. I'm sure there are a few other things. But considering they make like 10 billion new products a year and 99.9% of them fail hard, you know...


That being said, yes fuck Groupon.

 

[minsco]

I'm trying to figure out why you would do that. I do agree that the business model isn't sustainable for many years but your strategy doesn't make much sense.

Let's say you buy OTM puts for Groupon @ Jan 14 $5 Strike

You have a little under two year's to be right. That they will be worth nothing.

Now the bid/ask spread is going to kill you. Right now you will pay $1.25 per share to get that put. With the bid being $1. So you lost 20% instantly when you buy those puts. Let's just say the company goes bankrupt blah blah blah. So you can sell the shares @ $5 a piece or sell the options back into the market. So let's just assume the value of the options are $5.

Which would be a 400% ROI. Now is it really worth it to bet money on something that you think will fail in two years when it probably won't. The company would have to go belly up to see any real profit. Meanwhile you can easily return 400% doing other things. Hell you could cover call Groupon every month and get close to that. If you make 5% a month compounded over two years without getting called away. But if you really think it's going to go down.

Better just sell naked calls, but if you lose all your money don't blame me.

If Groupon isn't out of business by 2014, I will chop off my right nut (figuratively).They are running at a loss, at a time which is probably the peak of their business. Anyways, $3 puts on these things aren't very expensive, I believe .40-80 cents?. Of course there is a spread, but thats how you sell short without having unlimited liability.
Unless both of these companies turn around dramatically, they will both go out of business soon, two years is a pretty long time... I don't think they could go eight quarters without making money.
And yea, money could be invested in other places.. But I can spare, and sometimes its fun to take risks like this.
Also, I would never consider selling naked calls on these, thats just plain ludicrous.

 

[Cut]

If Groupon isn't out of business by 2014, I will chop off my right nut (figuratively).They are running at a loss, at a time which is probably the peak of their business. Anyways, $3 puts on these things aren't very expensive, I believe .40-80 cents?. Of course there is a spread, but thats how you sell short without having unlimited liability.
Unless both of these companies turn around dramatically, they will both go out of business soon, two years is a pretty long time... I don't think they could go eight quarters without making money.
And yea, money could be invested in other places.. But I can spare, and sometimes its fun to take risks like this.
Also, I would never consider selling naked calls on these, thats just plain ludicrous.

Spread is .45/.80 so you are losing half your money invested instantly.

I don't know about you but I would hate to lose half my money on a guess. Which is what you think is going to happen. It's all speculative anyways. I agree with you that Groupon and companies that continue to lose money will not be sustainable.