TL;DR: \~$858M market cap. Strip out a \~$268M SumUp stake and net cash and you're paying roughly $731M for the operating business — about 7.7x this year's EBITDA — for a marketplace with 16M+ active customers, \~90% gross margins, and a management team (Pale Fire Capital, \~25% economic owners) shrinking the share count into a float that's \~56% short. I'm long shares and calls, and I published an open letter to the board in May.
The five assumptions that drive my model
1. Frequency is the whole ballgame — and each turn is worth \~$100M.
Groupon customers transact \~2.4x/year. Comparable destination marketplaces run \~4.3x. At current take rates and margins, each +1.0 turn of purchase frequency drops \~$100M of EBITDA (\~$86M net of the product investment to earn it). My base case only gets to 3.5 turns by 2030 — still below comps — and that alone takes EBITDA from \~$95M (2026, consistent with the raised guide) to \~$150M in 2027 and \~$300M by 2030. Frequency is earned with the platform rebuild (AI-native re-launch, app redesign), not with ad spend — and in the age of AI that investment runs \~$15M a year per turn, not hundreds of millions.
2. Costs go down while the product gets better.
Project Foundry (announced with the Q1 print): up to 400 positions out, $20–25M annualized payroll savings, guidance raised to $75–80M EBITDA. Management said it themselves — this isn't the last round. My model has SG&A stepping down every year and stock comp falling with headcount, while tech spend grows with the frequency push. Skeptics say you can't cut costs and rebuild the platform simultaneously; AI is precisely how you do both.
3. The business collects cash before it pays it out.
Customers pay Groupon at purchase; merchants get paid later. That merchant-payable float means free cash flow runs ABOVE EBITDA while billings grow. This is a structurally cash-generative model at the turn, not a cash burner.
4. The buyback into a thin float is the equity story.
Management has said they'll run cash down to \~$100M — everything above the floor plus FCF plus SumUp proceeds goes to repurchases. Here's the mechanical part almost nobody models: the tradeable float is only \~20M shares (insiders/Pale Fire are locked), and \~70%+ of that float is sold short. I modeled the buyback with a real market-impact algorithm (square-root-law execution slippage + permanent supply lift from retiring float — the academic stuff, Almgren/Bagwell). Buy back half the float and the math says the stock isn't in the $20s anymore — it's north of $50, and every dollar of buyback executes into a rising tape. Share count in my base case: \~33.6M today → \~24M by 2030. The shorts need to buy back roughly 11M shares from a float management is actively deleting.
5. SumUp is a hidden asset worth \~30% of the market cap.
Groupon owns 1.79% of SumUp, carried at $74.8M cost. At the \~$15B valuations being discussed, that stake is \~$268M — and NOLs shield most of a sale. Monetized, it's buyback rocket fuel; unmonetized, it's a free call option the market prices at zero.
What the model spits out
• Base (frequency 3.5 by 2030, 12x EV/EBITDA): 24-month target \~$85 vs \~$25.53 spot. DCF at a 12.4% WACC says \~$74 today.
• Bull (frequency 4.2, 15x): \~$190+.
• Bear (frequency stays flat at 2.4 forever, 8x, no SumUp sale): \~$23 — about −11%. Flat business + the buyback + the asset value is the downside protection.
All three price targets are convert-aware (the $244M 2030 notes convert at $54.04 — above that, I dilute the share count instead of carrying the debt). The 2027 notes get repaid from cash in the model.
What kills the thesis
Frequency stalling at \~2.4 while marketing costs keep creeping (Goldman's SELL case, $10 PT); the SumUp IPO slipping or repricing; FCF staying as Q4-concentrated as it's been. If units-per-customer don't inflect in the next few prints, th