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Groupon Loses COO, Drastically Cuts Reported Revenue
itwbennett writes "Groupon COO Margo Georgiadis has quit after just 5 months on the job and is returning to Google to be the company's president for the Americas. Groupon's founder, Andrew Mason, wrote in a blog post that the company has undergone a reorganization with Georgiadis' departure, and now sales, channels, international and marketing will report directly to him. In other bad Groupon news, the company revealed in an SEC filing Friday that it was reporting revenue before it paid fees to merchants using Groupon. 'The effect of the correction resulted in a reduction of previously reported revenues and corresponding reductions in cost of revenue in those periods,' according to the filing."
Groupon is going to find itself in serious trouble soon due to an unsustainable business model and will be folding within the next 12-18 months?
If people bought into an IPO that was advertised with one set of revenues, and they were massively revised downwards after it happened, it'd be in the courts for years.
10 PRINT CHR$(205.5+RND(1)); : GOTO 10
Chief Operating/Operations Officer
Essentially, this position usually is the lead logistics position.
FanFictionRecs.net
"A textbook case of" *looks in textbook* "Fraw oo ud?"
Investors aren't stupid when it comes to money
ORLY?
Their "profit" in the first half of 2011 was a loss of $253 million...
http://www.sec.gov/Archives/edgar/data/1490281/000104746911008207/a2205238zs-1a.htm#toc_ce79801_1
Nerd rage is the funniest rage.
But they made up for it in volume.
If a net loss of over $100 million per quarter counts as "profit", then yes, Groupon is turning a profit.
Groupon is losing money, facing growing competition, and has a questionable business model. The restating of revenue is just icing on the cake. They should have taken the billions Google offered them when they had the chance.
I guess that's only if you find them to be disingenuous enough not to chase their adjusted revenues of US$312.9 million with an investment. What the article seems to be ignoring is that Groupon is still turning a profit.
But as an investor, why would you trust these guys to use your investment wisely?
Where Did Grouponâ(TM)s Billion Dollars Go?
"Groupon raised a total of $946 million in two funding rounds last winter. It kept $136 million of it help run the money-losing company. The remaining $810 million was paid out, via stock purchases, to CEO Andrew Mason and some of his backers, including Eric Lefkofsky, and, notably, the Samwer brothers, who sold their CityDeal company to Groupon in 2010."
Do you want to be the sucker left holding the empty bag at the end?
Today's deal is 50% off popular deal site GroupOn! Ever wanted to own your own website that uses quirky ad copy to sell local services at 50% off of double the retail price? Is owning a website that was the cat's pajamas 3 months ago up your alley, assuming alley cats wear 3-month-old pajamas? If so, this deal is for you!
how many pairs of boxer shorts should you own?
If that was all - here is their filing below.
RESTATEMENT The Company has restated its previously issued Consolidated Statements of Operations for the years ended December 31, 2008, 2009 and 2010 to correct for an error in its presentation of revenue.
Most significantly, the Company restated its reporting of revenues from Groupons to be net of the amounts related to merchant fees. Historically, the Company has reported the gross amounts billed to its subscribers as revenue. All prior periods have been restated to show the net amount the Company retains after paying the merchant fees. The effect of the correction resulted in a reduction of previously reported revenues and corresponding reductions in cost of revenue in those periods. The change in presentation had no effect on pre-tax loss, net loss or any per share amounts for any period presented.
The Company has also changed the presentation of certain other income statement expenses to be consistent with reporting revenue on a net basis. These changes include presenting loyalty programs as a component of marketing rather than as an offset to revenue. The Company believes that this classification is most appropriate as it is acting as an agent on behalf of the merchant in driving traffic to generate revenue. In addition, refunds made to subscribers under the Groupon Promise are presented as a component of cost of revenue, rather than as an offset to revenue, as these amounts are not paid directly to the merchants.
Credit card and other processing expenses have been reclassified to cost of revenue from selling, general and administrative for all periods presented. The Company has concluded the amounts could alternatively be viewed as a cost of the service the Company is providing.
So not only did they change their revenue recognition policies, they also had an "error" which is separate. And then they had to restate revenues from their loyalty programs and credit card payments. What were they making up their accounts for two years? Crayons and Etch-a-Sketch?
http://slashdot.org/submission/1062723/Cheap-mobile-data-plan?art_pos=2
Please. This is a company co-founded by Eric Lefkovsky. Some of us haven't forgotten Halo/Starbelly from the first dot-com bubble. Apparently he's working his magic yet again. The slight-of-hand doesn't even appear to be so very different from the 2001 state-of-the-art.
<scottish_accent>
10 coos in a field. Which one's closest to Iraq?
Coo 8.
10 coos in a field. Which one's on holiday?
The one with the wee calf.
</scottish_accent>
C-x C-s C-x k
Thing is, those websites (and Groupon in particular) are getting a bit of a reputation.
Local business gets approached by Groupon. The deal is: make a fantastic offer (around 70% off); of the remaining 30% you charge, you keep half, Groupon keep half.
In theory, you turn the influx of customers (that you're heavily subsidising) into regulars. In practise, lots of businesses have found the sort of customer who comes in on a Groupon deal is the sort of customer who never under any circumstances would even dream of coming back at full price.
My money is on Groupon's knowledge that Google's due diligence would uncover the rotten underbelly of their business and thus the deal would never have gone through and Groupon would be exposed. Much safer to bilk investors with "On The Internet" fever.
Eric Lefkofsky is supposedly already a billionaire, though quite how much of that is based on his Groupon stock I don't know. Even if Groupon went bankrupt tomorrow he's already pulled hundreds of millions from the company so he'll not exactly be poor. You know all that investment Groupon got? Best part of a billion bucks? Yeah, that was mostly used to cash out the early investors, Lefkofsky included, at massively inflated stock prices.
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