The brokerage house Evercore doesn't believe Groupon. No one else does either:
The brokerage said Groupon Goods, the company's consumer products category, is increasingly becoming the merchant of record - the owner of goods being sold or the first-party seller.
As first-party sales assume inventory risk and drive higher revenue contribution, the composition of Groupon's first-quarter revenue beat in North America has become questionable, analyst Ken Sena wrote in a note.
"Growth in unique visitors in the U.S. to Groupon.com, which can be looked at as a proxy for subscriber growth, exhibited negative year-over-year trends this quarter," Sena said.
Essentially, no one is buying stuff from Groupon, which leaves them holding the bag on lots of it.
In a related story, people are sick of Farmville, which is hurting Zynga:
A slew of analysts cut their ratings and price targets for Zynga after it reported lower-than-expected quarterly results on Wednesday and forecast a much smaller 2012 profit.
Zynga has been hit by user fatigue for some of its long-running games and a shift in the way Facebook Inc's social platform promotes games.
"The biggest factor impacting current performance appears to be the way Facebook is surfacing gaming content on its platform," JP Morgan's Doug Anmuth wrote in a note to clients.
Actually, Facebook users just got bored of FarmVille, and it's hard to blame them. This is what happens when companies stop innovating in favor of milking their cash cows. (Sorry.)