Broeb22

Grey512, Can you explain your long for Groupon? They generate a lot of float in the same way Blue Chip Stamps did, and this contributes to nice FCF. Now, their new CEO has committed to spending an additional $200MM on marketing and advertising to restore growth. This is coincidentally the same amount of FCF GRPN was generating. So I don't see the go-forward FCF that I did before the new CEO was announced. Net of cash and investments, Groupon's market cap is more like $1BN. The last 3 years it has averaged CFO of $258MM and CapEx of 83MM, for average FCF of 175MM. So, if the new CEO doesn't destroy Groupon's FCF in the pursuit of growth, Groupon trades at a 17.5% FCF yield. FCF has been driven by changes in operating assets, essentially Groupon not paying its vendors as fast it receives the cash, so if the new CEO drives growth at Groupon then FCF could grow, but netting this potential benefit out against his certain $200MM investment in customer acquisition makes me scratch my head. Not to mention from a competitive perspective, if we're comparing GRPN to Blue Chip Stamps, Groupon has a bigger market (global) with significantly more competition while Blue Chip Stamps (from my understanding) was a monopoly in the areas of California it served. Would love your thoughts on any of the points.

They are distributed by non-profits, but I was always jealous of the SAT/ACT/GRE tests for the above reasons. Does anyone know of any public companies who earn a non-trivial amount of profit from certifications or tests? Post-Cable One spin, Graham Holdings earnings are in part driven by the education segment which includes these kinds of tests.