http://online.wsj.com/article/SB10001424053111903791504576589211214409214.html?mod=WSJ_Tech_LEFTTopNews
I don’t claim to be a financial genius; I am just a practical guy. But for crying out loud why in the world would Groupon think it could get away with redefining revenue. What financial advisor told them to do that?
STUPID. GREEDY. All this to get a $20 Billion valuation? Now let me get this straight. If Groupon had not been so stupidly creative in its IPO filing, the IPO would have been approved? I am sure it is not this simple.
The company has had to restate its revenue; dropping it from $713.4 M to $312.9 M. Oh my gosh, a $312.9 M valuation for a penny saver is fantastic.
Now Groupon’s COO, Margo Georgiadis is taking the bullet for the C-level team and the board and is leaving the company. Yep, I think the CEO and the board are responsible for what has happened.
I will be blunt, you do not need to be a CPA or an MBA to wonder how you can claim as revenue the total value of the coupon when you have not even cashed it in and actually generated real revenue. In other words, Groupon was treating the perceived value of the coupon as if it were cash when no cash had been collected.
Just plain stupid.
What is Groupon going to do to fix this? How in the world can Groupon think it can launch an IPO before it gets its house in order?
On the surface it looks like the company is growing too fast and needs to ratchet down its plans before it has to shut down. Am I Monday morning quarterbacking? Yeah just a little but so what. As professionals begin to dig deeper into what was and is going on at Groupon scary stories are emerging about the coupon business and how the retail businesses are actually losing money on dealing with companies like Groupon. I made a suggestion in my last several postings and that was Groupon should take less and give more to their customers.
How in the world are the CEO and board of Groupon going to justify a $312.9 M valuation now when it looks like the company's past efforts to create a valuation were all based on IMAGINATION? Based on the company’s current situation and the competitive marketplace, retailers will be running far and fast from Groupon.