Andrew Mason met Groupon’s earliest investor Eric Lefkofsky in 2003 when he was working as a web designer. The two stayed close and five years later Lefkofsky provided $1 million to fund Mason’s first entrepreneurial attempt, a company called “The Point”. The Point, which eventually became Groupon, was an interactive web platform that originally intended to bring groups of like minded people together behind a social cause like hunger or helping the homeless. When this idea proved to be too abstract, Mason and Lefkofsky pivoted to a more commercially friendly application of the same concept: Groupon. Groupon, as we all know, would eventually grow into one of the most talked about and hyped tech companies in recent history. Groupon today has over 11,400 employees worldwide and has sold an estimated six million group coupons. Groupon was so hot at one point that they even turned down an all cash $6 billion buyout offer from Google. That offer would have put $420 million cash in Mason’s pocket and exactly $1 billion in Lefkofsky’s. Turning down $6 billion from Google shocked the world. On the other hand, investors were confident that a company with as much heat and momentum as Groupon had back in 2011 would surely fetch far more in value with an IPO.
So what went wrong? GRPN debuted on the NASDAQ in early November 2011 at $26 per share. Investors and employees rejoiced at their new found fortunes. Mason’s 45,934,504 shares were worth$1.196 billion. Eric Lefkofsky’s 109,364,216 shares were worth a whopping $2.86 billion. Unfortunately for Groupon, the $26 debut share price would be the company’s all time high point. Thanks to a series of embarrassing accounting errors and irregularities, not only did the stock decline but it began a slow death march right around December 23, 2011. Adding fuel to the fire was the unforeseen fact that group daily deals turned out to be somewhat of a fad. Most people have tried Groupon or one of the dozens of imitators, at least once and many were not impressed. Worse, stories of small businesses who lost thousands of dollars offering a Groupon became common. One of Groupon’s biggest challenges was fending off the never ending crop of imitator companies and the need to constantly hunt for new local businesses to offer a deal. In order to successfully meet these challenges, Groupon had to hire thousand of new employees around the world. By comparison, Groupon today has 11,400 employees while Facebook only has 5000. These rising costs shrunk margins at a time when revenue was falling precipitously.
Mason didn’t exactly help his own cause. The 31 year old CEO was known for being a bit of a goofball who perhaps did not take his role as CEO of a major publicly traded company seriously enough. For example, at one point without explanation Mason posted a 9 minute video of himself doing yogo in tighty-whitey underwear on YouTube. As Groupon began to plummet, Mason was named “Worst CEO of the Year” by several CNBC anchors and many investors called for his head. That finally happened yesterday, February 28, 2013, when the Groupon board announced they had fired Andrew Mason. Mason’s severance package is not what you would expect from a big wig corporate CEO. He will walk away with six months salary which unfortunately amounts to just $378.36 because as CEO Mason took an annual salary of $756.72. He will be covered on the company’s health plan for 180 days. Mason has been hit the hardest when it comes to his personal net worth. Over the 16 months Groupon has been public, the value of Mason’s 46 million shares peaked at $1.2 billion. Today, after the company has lost 80% of its value, Mason’s shares are worth $230 million. Hard to feel too bad for a guy who is still worth hundreds of millions of dollars, but it still can’t be fun to lose $1 billion in a matter of months. And who knows what the future holds for Groupon. Its shares were up 11% on the news of Mason’s firing, but is that enough to turn the bloated and potentially doomed company around?
Who is the seller?
Lanai is owned by self made Ohio-born billionaire David Murdock who has a net worth of $3.3 billion. Murdock dropped out of high school after 9th grade and made his first fortune in commercial real estate mainly in Arizona and Los Angeles. In 1985 he used his resources to acquire the Hawaiian company Castle & Cooke, which owned the Dole Food Company. Castle & Cooke was on the verge of bankruptcy after years of neglect and mismanagement, but it still owned an impressive portfolio of real estate across the world, including several amazing tropical islands. One of those locations was Lanai island, which was purchased in 1922 by James Dole, the president of what would later become the Dole Food Company. Dole turned Lanai into a major pineapple plantation and distribution point for his company. In 2000, Murdock paid $700 million so he could privately own Lanai island separate from Castle & Cooke. Today, Lanai only attracts around 25,000 tourists a year and actually costs $30 million a year to maintain.
Who are the buyers?
If you want to own Lanai island, you will likely have to compete with two of the richest men in the world; Bill Gates and Larry Ellison. Bill Gates, who has a net worth of $62 billion, married his wife Melinda on the island in 1994. Larry Ellison, who has a net worth of $36 billion, already owns a house on Lanai. Both men are extremely competitive. Larry reportedly hates Bill Gates with a passion and will stop at nothing to acquire the island over his rival. So it should be interesting to see what plays out with Lanai. If you could take a tropical vacation anywhere in the world, where would you go? You could always check out the Thomas Crown Affair Island House in Martinique. Might be slightly more affordable than a $600 million private island that costs $30 million a year to own!
a typical street level ecstasy dealer can earn yearly profits of $480,000, a transporter takes home $2.4 million and a middle man makes $4.2 million A YEAR! Obviously if anyone involved in this ecstasy supply chain is caught, he or she risks a very long jail sentance. Not to mention that dealing drugs is can also be extremely dangerous, resulting in bodily harm or even death from rival dealers. So, now that you know the potential rewards, do you think dealing drugs is worth the risk?
What is the most expensive yacht in the world? You might want to sit down before you read the next sentence. The most expensive yacht in the world is the $4.8 billion, gold plated, History Supreme that was built for a one very wealthy and very anonymous Malaysian multi-multi-billionaire. The History Supreme is a 100 foot yacht that is adorned with 100 thousand kilograms (220,000 pounds) of solid gold and platinum. It also features some of the rarest and most un-obtainable decorations found in the universe. The History Supreme was built by UK based Start Hughes and Company and took over three years to complete.
In case you were wondering, $4.8 billion is 5 times more expensive than the #2 most expensive Yacht in the world, the $800 million Eclipse which is owned by Russian billionaire Roman Abramovich. For $4 billion less, the Eclipse is 557 feet (457 feet longer than the History Supreme) and features an anti-missile defense system, helicopter (plus landing pad) and an anti-paparazzi laser shield that scans and blocks nearby prying camera lenses. So what does the the extra $4 billion buy? Every single rail, deck, staircase, dining table and the anchor on the History Supreme is wrapped in solid gold or platinum. The entire base of the boat is wrapped in a thin layer of solid gold. The master bedroom is decorated with rocks from a meteorite, a 68 kilogram 24-carat gold aquarium and an actual bone from a Tyrannosaurus Rex! Also on board you may find your self drinking out a liquor bottle that features an extremely rare 18.5 carat diamond worth $45 million on its own.
Some speculate the the owner of the most expensive yacht in the world is Malaysian billionaire Robert Kuok who has a net worth of $14.5 billion. Kuok is the richest person in Southeast Asia and made his fortune from a wide range of businesses including sugarcane plantations and hotels. He is nicknamed the “Sugar King of Asia” but if he really is the owner of the History Supreme, perhaps his nickname should be the “Yachting King of the World”
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