I wrote about the Groupon IPO the day before the company listed the stock LINK. I play in most IPOs and Secondaries. I got the prospective for the GRPN deal, looked it over and concluded it was a junk deal. I got an allotment of shares in the IPO and sold them 15 seconds after the shares opened for trading. I’m one of the very few who has made a buck on the long side of this dog.
Morgan Stanley brought this deal to the street. I think MS did a terrible job of due diligence. If a guy like me who is sitting on the outside of the deal could figure that GRPN was a loser, then you can be damn sure the folks wearing the white spats at MS new it was crap as well.
The article I wrote back in November likened the GRPN IPO to a deal that I had worked on years before. I was tasked with arranging the funding for a fat rendering plant in Mexico. My description:
The plan called for trainloads of cow guts to arrive at the new factory every day. The trains would come from all over Mexico and suffer delays. The thought of train cars filled with guts sitting on some side rail for a week or two put a taint on the deal.
The lawyers tried to dress up the documents. The words “Cow guts” were deleted and the word “Offal was” inserted.
The deal quickly got nicknamed the Offal Deal. From there, some smart guy renamed it again as the Awful Deal. That name stuck.
MS has brought us another Awful Deal, basically MS sold Offal to the public. My closing thoughts on the night before the GRPN deal:
For the folks at MS this was their awful deal. It might prove to be the same for investors.
Awful Offal
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Worried about Italy? Worry about France!
The Euro is in the crapper again this morning. The Italian elections are hanging over the FX markets. Italy is a looming problem, but the real issue is what is going on in France. It seems that the French citizens have turned against their new leader, Francois Hollande, in a rather spectacular way.
Italy is a critical part of the EU pie, but France is make-or-break.
What will happen in France when the weather turns warm and and young people faced with 25% youth unemployment and no prospects for a job hit the streets? Trouble.
BK what is with this line of thought lately that the US stock market does not care about Europe anymore than the fundamentals of the US stock in question.Seems a little like whistling past the graveyard to me.
One thing I REALLY admire about the French people is when they get upset with govt, they do something decisive – I’m talking about THE GUILLOTINE here. I guess it won’t be long before the French people wheel it back out and start executing the EU officials.
Here’s hoping…
“MS did a terrible job of due diligence”
Oh come now. They new exactly what this crap was. They just don’t give a shit. Why should they? They will never be held accountable any more than any of the other untouchables. Retail investor BEWARE.
Gotta admit that Europeans know how to protest !