revenues != profit. 50% of their revenue goes directly to the company's running the campaign. They then need to cover all business expenses ect with the other 50%. Assuming constant rather than declining sales and 5% of revenue being actual profit they would be worth ~300m + cash on hand or ~1.5 billion. Also, while they might be 'profitable' if there sales are declining without unsustainable advertising they may be worth little more than their cash on hand.
PS: While they might seem like a tech company with high R&D costs that scales really well, they actually need a huge sales force to deal with local company's so they are stuck with crap profit margins relative to most tech stocks.
Groupon Loses Market Share as Online Daily Deals Decline(By Douglas MacMillan on August 15, 2012)
At Groupon Inc. (GRPN), daily deals are fading. That’s the message the company sent many investors this week when it reported a decline in gross billings, or the total value of goods and services bought on its site, between the first and second quarters of this year.
