A Groupon, Inc. (GRPN) spokesperson revealed in an interview with GeekWire that the company and Expedia, Inc (EXPE) have mutually decided to bring to an end their three-year partnership. The association, which focused on helping the two companies sell heavily discounted deals together, will not be renewed.
Groupon Inc.’s decision to fire Andrew Mason puts pressure on Chairman Eric Lefkofsky to find a replacement who can create a money-making business after the daily-deal provider lost US$723.8-million in the past three years.
As chief executive officer, Mason presided over a plummeting stock price, restated earnings and at least three quarters of results that missed analysts’ expectations. Mason, 32, addressed his ouster yesterday in a letter to employees, joking about needing a “fat camp” to lose weight even while accepting responsibility for Groupon’s shortcomings.
Last November, in a post entitled “Numbers Behind Groupon’s Business Warrant Caution After First Day Pop”, I cautioned investors that the IPO of daily deal leader Groupon (GRPN) looked sky-high at the initial offer price of $20 per share, which valued the company at an astounding $13 billion:
A little more than two years ago, Groupon was the apple of the startup community’s eye. It had turned down a $6 billion acquisition offer from Google and was headed for a remarkable IPO. Today, no one really knows what Groupon’s future holds. But it doesn’t look good.
Groupon Inc (GRPN) stock is sinking today following a downgrade by Evercore, from Equal Weight to a Sell rating. The investment firm has maintained its 12-month price target of $5.5 on the stock. Evercore believes Groupon will not be able to meet its guidance for adjusted EBITDA this year. The stock is already down 46.2% year-to-date due to the company’s guidance coming in below analysts’ estimate.