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IP Uh Oh

IP Uh Oh

Andrew Mason: Groupon’s Future To Come From Moments of ‘Sheer Stupidity’

groupon-cat-360

Hey, look! Groupon’s stock prospectus is out! There are plenty of numbers and mind-numbing details in it that we won’t bore you with. Instead we’ll just focus on the crazypants guru talk Andrew Mason threw in there, which distinguishes Groupon from the average I.P.O. stock prospectus out there.

Take, for example, the following quote from Mr. Mason’s letter to potential stockholders: Read More

IP Uh Oh

A Brief History of Groupon Valuations, Told (Mostly) Through TechCrunch Headlines

groupon valuation chart

What happens when you combine tech investment fervor, hype-as-absurdist-performance-art and the kind of advanced mathematics required by birthday party magicians to “pick a number, any number at all”? You get a brief history of Groupon’s valuations in the press. This is what a coupon company whose value increases by a factor of 48 in less than two years looks like in TechCrunch headlines (with exceptions for context). Read More

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Groupon Promises to Stop Spending on Things That Don’t Work So Good No More

Just not the best fit, probably.

Groupon filed an amended S-1 document today for its delayed IPO, which has been under scrutiny from investors and the SEC. The startup has been critiqued for the fact that is has had to boost spending to add users to its email list. The filing says the company plans to “significantly” reduce online marketing spending “over time as such investments yield insufficient returns,” reports Bloomberg.

According to the filing, those marketing costs stopped paying off because of “changes in subscriber economics, achievement of subscriber saturation levels in various markets or a determination that subscriber growth objectives can be satisfied though alternative means.”

The company insists that cutting back won’t negatively impact businesses with existing subscribers, although trends have shown users tend to be less engaged and profitable over time. Read More

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Venture-Backed IPOs Are Already Feeling That Startup Winter

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The latest numbers don’t bode well for those long suffering VCs hoping for an IPO exit. According to a poll from Thomson Reuters and the National Venture Capital Association, venture-backed IPO exits are at the weakest point, dollar wise, since the fourth quarter of 2009. In the third quarter of this year, only five such companies went public, down 77 percent from Q2 and 64 percent year over year.

That might be why New York magazine’s lengthy Twitter profile reported, “The intense pressure to convert Twitter into a profitable business, and before a tech bubble pops, is palpable here.”

But the bubble does come with another pressure valve. Read More

IP Uh Oh

Groupon Through the Glass Door, Darkly

Employees of the daily deal giant have filed a class action lawsuit claiming Groupon failed to pay them millions of dollars in overtime pay. It’s another blow to an already shaky company, whose accounting is being questioned by the SEC. Groupon cancelled its IPO roadshow earlier this week.

The story broke in PaidContent, which mentioned that several posts on Glass Door, a site where employees can anonymously rate their company and bosses, made mention of long hours under difficult conditions. Betabeat wandered over to check out some of these reviews. What we found was a little shocking. Some choice reviews: Read More

IP Uh Oh

Groupon PR Debacle Fuels Momentum for Killing the IPO Quiet Period

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While you were distracted with the “nuclear situation” over at TechCrunch, Groupon, apparently, took the opportunity to make things even more toxic for itself in the press by once again flouting the SEC-mandated quiet period between filing for an IPO and actually going public.

Just before the long weekend, Michael Buckley from Brunswick Group, a PR firm employed by Groupon, not only called peHUB reporter Connie Loizos to complain about a story, but to get her facts straight, Mr. Buckley suggested taking a look at a leaked memo from Groupon CEO Andrew Mason that somehow found its way into Kara Swisher’s hands at AllThingsD. Yup, the very same leaked memo that Henry Blodget alleged violated securities law. Ms. Swisher’s role in that aside, as Ms. Loizos points out, the quiet period does not permit “calling journalists and urging them to read leaked CEO letters.”

As Fortune.com‘s Dan Primack sees it, however, the fault lies with the SEC, not Groupon. In the latest issue of the magazine, he makes his position clear with the headline, “It’s time to kill the IPO quiet period.” Read More

IP Uh Oh

Henry Blodget Says Kara Swisher Helped Groupon Violate SEC Quiet Period

I'm telling you this Pets.com is a winner!

Henry Blodget knows a thing or two about securities violations. During the dot-com boom he rose to the the position of number one Internet analyst at Merrill Lynch. Bu after the bubble burst, he was indicted by Elliot Spitzer for securities fraud, when emails emerged that showed him bad mouthing stocks in private that he was pumping up in public. Mr. Blodget agreed to pay $4 million in total and was banned from the securities business for life.

Today Mr. Blodget, in his reincarnation as a tech blogger at Business Insider, pointed out what he saw as a suspicious series of events. Groupon, which has filed for an IPO, has been taking a lot of heat from both the press and the SEC over its unique accounting methods. Because of the SEC’s “quiet period”, which prohibits companies who have filed for IPO from promoting themselves, Groupon cannot defend itself publicly.

But Blodget argues that, “The clever method Groupon is using to try to get around the SEC’s quiet period rule is writing a detailed public communication in the form of a CEO “letter to employees” that Groupon has then distributed publicly with the help of a trusted media outlet.” Read More