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.
By Mazen Abdallah:Much has to be said about the viability of Groupon’s (GRPN) business model. Commentators across the board have accurately identified significant obstacles to Groupon’s continued growth and aspirations of becoming a profitable enterprise.