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First You Screw Up, Then Lie and Finally Die

Stocks in this article: GRPN

So after a while I unsubscribed, and that was the last I thought about Groupon until all the bad publicity started coming in. But if I was examining Groupon from an investment standpoint, that would have soured me on the IPO from the beginning. My common sense would have told me that Groupon was in the first phase of screw-up-lie-die. And, speaking of deals, look at all the money I'd have saved by not buying into the IPO! Why, if you ask me, that saving is better than pretty much anything I've seen offered by Groupon.

Groupon is certainly not the only company where one or more phases of screw-up-lie-die are being played out. Sometimes, the template is abbreviated, with the "lie" part omitted, but the third part is almost always inevitable.

Green Mountain Coffee Roasters is a fine example of this. Forensic accountants are all over the alleged accounting peccadilloes of this Vermont-based outfit, which has built up an almost cult-like fervor among its shareholders. Critics maintain that the "lie" part of screw-up-lie-die template is under way. That may well be, but, personally, I am still hung up on what the company does -- or, to put it another way, what it doesn't do, which is to sell a product that strikes me as being remotely useful.

Green Mountain Coffee sells "quality" coffee at prices that, I've found, are actually more costly than the terrific beans, ground to my liking, that I can buy at my favorite coffee roaster on Bleecker Street in Greenwich Village. True, Green Mountain's coffee is available in single-serving portions as K-Cups, manufactured by its Keurig subsidiary. But my Mr. Coffee coffeemaker, which I picked up at Walmart for about twenty bucks a few years ago, makes terrific single servings of coffee. If that ever goes on the fritz, I've got a French press up on the shelf that works fine. If that breaks, my old percolator will do nicely.

If you ask me, there's something profoundly flawed about a business model that assumes that customers don't know how to make a decent cup of coffee. Maybe a lot of people don't, but I wouldn't bet the farm on it, even if its accounting was flawless.

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