Best Buy vs. Groupon: Deadliest Portfolio Killer
NEW YORK (TheStreet) -- If you look at a chart for either Groupon (GRPN) or Best Buy (BBY), the first thing an investor is likely to notice is that they both travel from the top left to the bottom right. Best Buy is from the old guard jumbo box retail while Groupon is part of the online revolution in marketing; however, they both share many similarities beyond causing investor losses.
Groupon is headquartered in Chicago, and the stock trades an average of 7.1 million shares per day with a market cap of $5.7 billion. Since its IPO, the most consistent aspect of Groupon is the price decline in its share price.
I like how Groupon reminds me of 1998 and the dot.com bubble. Technology IPOs from companies that lose money bring me back to the days of watching the movie "Rounders" and listening to Santana's "Smooth" on the radio.
Mark Twain is often credited to have said, "History doesn't repeat itself, but it often rhymes." I don't know if he said it or not, as I wasn't there, but it sounds like him. Nevertheless, it sure holds true in the stock market. Funny how quickly people forget history, or maybe it's new investors who haven't studied the past bubbles. It could be that people believe "this time is different." Two things turn on my BS alert system the fastest. When I hear or read "this time is different" or "studies show _______ (fill in useless BS here)." The average analyst price target is $18.88, and the only way I can figure out how they came up with a number like that is that they typed the wrong symbol into the system during the company examination. In the last month alone, Groupon has lost 15% of its value, and there is little reason to believe the trend is about to end. But we are getting ahead of ourselves. Let's take a look at Groupon's biggest-loser competitor: Best Buy. The company was founded in 1966 and is headquartered in Richfield, Mn. Best Buy trades an average of 12 million shares per day with a market cap of $7.2 billion.Select the service that is right for you!
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