More accounting irregularities threaten to derail the hottest IPO of 2011 || “More Trouble for Groupon IPO” http://ow.ly/6DSZO
The late Irish dramatist Brendan Behan once said that “there is no such thing as bad publicity except your own obituary” and I can’t help but think that the folks over at Groupon might want to rethink their brash rhetoric heading into their currently scheduled IPO. This week the daily deals giant received more than their fair share of bad press following the unexpected departure of their COO Margo Georgiadis only five months after Groupon lured her away from Google (Ms. Georgiadis is returning to her old employer as President of the Americas). Undoubtedly of more of more concern to investors was the news that Groupon had been miscalculating their top-line revenue for at least 2010 and 2011 year-to-date by including those fees collected on behalf of merchants. As a result Groupon reduced their 2010 revenues by more than 56% from $713 million to $313 million. For the first half of 2011 the revenues were revised downward by more than 54% from $1.5 billion to just $688 million. I would hope that these new numbers will give sensible investors a reason to reconsider the estimated $20 billion valuation that Groupon is currently seeking.
That spurned $5 billion buy-out offer from Google is probably looking pretty good right about now.
- Groupon IPO: Revenue Corrected for ‘Error’ (blogs.wsj.com)
- Groupon Operating Chief Margo Georgiadis Will Rejoin Google (businessweek.com)
- Groupon Executive Steps Down (dealbook.nytimes.com)
- Groupon COO leaves to go back to Google (seattletimes.nwsource.com)
- More: Groupon Amends Its S-1 IPO Filing — Again — Over Accounting Issues and CEO Letter (allthingsd.com)
- Groupon says sales half earlier figure, loses COO (sfgate.com)
- Groupon Operating Chief Leaves as Company Restates Revenue (businessweek.com)
- Uh-Oh: Groupon Loses New COO, Who’s Going Back to Google (allthingsd.com)
- Groupon slashes reported revenue by half, COO exits after 5 months (news.cnet.com)