Groupon will reap 'wild profits', says chairman
Tuesday 07 June 2011
The chairman of Groupon has sought to play down fears around the value of the discounting site as it prepares to go public, predicting it would be "wildly profitable".
Yet the statements could land the company in hot water with the regulators as it is currently in a "quiet period" during which management is not supposed to talk about its financial prospects.
Groupon filed its formal initial public offering documents to the Securities and Exchange Commission (SEC) last Thursday, outlining its plans to raise $750m.
Yet, companies preparing to go public are limited in what they can say to potential investors, and the chief executive Andrew Mason moved to prevent a gaffe with a company-wide memo to staff last week.
Mr Mason said in the memo that the company would be in a quiet period for the following 90 days after filing "where we can't make any forward-looking statements about the company". He added that "anything we say now can be perceived as 'fluffing the stock' or something like that. So please don't say anything like 'Groupon is awesome' around anyone you don't fully trust."
Yet the chairman Eric Lefkofsky ignored his chief executive, after he was grilled on the track record of his companies, which included the response to Bloomberg that "Groupon is going to be wildly profitable". A spokesman for the SEC declined to comment on whether the regulator was to look at Mr Lefkofsky's statements.
Groupon released its financial performance in last week's prospectus. It showed the company has not made a net profit in its three years of operating and made a loss of $420m in 2010. It showed that at the end of March, the company had 83.1 million subscribers and 7,107 employees. Experts have placed question marks over when Groupon will become profitable, especially after the company said it expects "operating expenses will increase substantially in the foreseeable future". Some warned that it faced increasingly fierce competition.
This comes at a time when many fear that the excitement around online companies going public could usher in a second technology bubble. LinkedIn went public last month and its shares immediately doubled on the first day of trading.
Is your name now 'banned' in Saudi Arabia?
Exclusive: World’s most pristine waters are polluted by US Navy human waste
Croatia's second city to close 'worst zoo in the world' after reports of 'nightmare' conditions and 'depressed' animals
Missing Malaysia Airlines Flight MH370: Net widens after claims final satellite signal of stricken jetliner could have been sent from the ground
Missing Malaysia Airlines Flight MH370 Q&A by Simon Calder: How far could it have travelled? Who was responsible and what would their plans be? And how can a plane just vanish?
Katie Hopkins continues campaign to become Britain's most hated talking head with poorly timed Bob Crow tweet
No EU referendum under Labour: Ed Miliband to reveal that vote on membership is ‘unlikely’ in next Parliament if party wins power
Ukip and Nigel Farage on course for remarkable victory in European elections
Tony Benn was entirely ineffectual - and usually wrong
Grace Dent: Who cares if she spells it Barraco Barner? Gemma Worrall is more employable than some bookish arts graduate
The rise of Ukip: Study warns Labour that Eurosceptic party's electoral base now 'more working class than any of the main parties'
- 1 Is your name now 'banned' in Saudi Arabia?
- 2 Gender-specific books demean all our children. So the Independent on Sunday will no longer review anything marketed to exclude either sex
- 3 Malaysia flight MH370: Pitbull song lyrics bear uncanny resemblance to missing plane mystery, according to YouTubers
- 4 Missing Malaysia Airlines Flight MH370 Q&A by Simon Calder: How far could it have travelled? Who was responsible and what would their plans be? And how can a plane just vanish?
- 5 'Missing Malaysia Airlines Flight MH370 plane found in Bermuda Triangle!' Viral Facebook links are profiting hackers
iJobs Money & Business
£35000 - £43000 per annum + Bonus and Benefits: Harrington Starr: A global lea...
£50000 - £60000 per annum: Harrington Starr: Linux Systems Administrator - UNI...
£32000 - £36000 per annum + generous benefits: Pro-Recruitment Group: * TAX * ...
£37000 - £40000 per annum + £20000 benefits package: Pro-Recruitment Group: **...