Oh Groupon. What are we going to do with you?
Remember when Google offered them $6B and they walked away?
Then they went public, in the hopes they would make more than $6B (they were valued at $17B, but raised only $700 million), and now Crain’s Chicago Business is calling for adult supervision, based on the accounting irregularities they provided to Wall Street.
On March 30, they disclosed a “material weakness in internal controls” and restated 2011 Q4 earnings, turning a $15 million operating profit into a $65 million operating loss. Yes. A sixty-five million dollar loss.
But it gets worse (can it get worse than losing that much money?).
When interviewed by the Financial Times about the gross miscalculations, they responded by saying they’re still a new company and don’t know what they’re doing.
People forget we’re a new company. It’s one of those things where, OK, we’re still growing up as a company. Now that we figured that out, there’s no reason to think it’s going to happen again.
Put THAT in your pipe and smoke it, as my mom would say.
As it turns out, however, you can use that excuse when you’re private and the only stockholder is you (or a handful of your friends and family). But when you go public and your stockholders are, well, the public, it’s not an excuse you can use.
Plus, it’s the Financial Times, whose readers are business leaders and the investment community. A message you don’t want to drive home to that audience: Hey guys! Invest in us. We’ll figure it out…eventually. In the meantime, we’re going to lose a bunch of money for you. But don’t worry. You’ll get it back. We promise!
They have a huge corporate communication crisis on their hands, which started last August when they violated their IPO quiet period causing their vice president of global communications to get fed up and quit.
They went six months without any communication leadership when Paul Taaffe, the former chairman and CEO of Hill & Knowlton, was hired. While he’s been there for only two months, he’s experienced enough to quickly get their act together.
Which leads me to believe Andrew Mason, the founder of Groupon, and the investment dynamos, Eric Lefkofsky and Brad Keywell, are calling all the shots.
ALL. The. Shots.
Groupon no longer is a new company. They’ve been publicly listed for six months. They can’t make such big accounting mistakes and then shrug it off by saying they don’t have their collective shit together yet.
It’s time to grow up…both as a company and as a communication team.