(Image source: The Dragonfly Effect)
BY BRICE SANDER
Forget extreme couponing, it’s extreme money troubles for Groupon. MSNBC’s Alex Witt explains.
ALEX WITT: “The daily deals website now reporting revenue that is half of what it initially claimed. Instead of $1.5 billion in sales during the first half of the year, Groupon now says it earned $688 million. The change coming after the company corrected an accounting error. Whoops.”
Whoops is right- this news comes after SEC papers showed Groupon worked with a NEGATIVE $305 million in capital for the first half of 2011. And Bloomberg points out another big blunder at the coupon company.
JON ERLICHMAN: “You mentioned that their COO is going back to Google after five months with Groupon and that raises concerns given that Google now has its own deals service. And- on top of that- you have to raise questions about whether or not this is a hiring problem at Groupon because this isn’t the first time they’ve gone through a COO.”
Did we mention the business is planning on going public? A CNET blogger suggests the company couldn’t sell stock even if Grouponed its shares.
“Those internal problems could be cause for concern among investors … Groupon’s troubles are compounded by the volatile market. As stocks continue to slide, offering shares now might be a mistake. And Groupon executives ... are finding it harder to justify going public right now…”
The mess has an IT World blogger wondering if the company will live to see another daily deal.
“Given Groupon's train-wreck of an IPO, unprofessional management, and -- last but not least -- continuing losses, you have to wonder not whether the company will survive, but for how long.”
For now, Groupon’s postponed its initial public offering. A Huliq blogger argues that’s a good first move in avoiding another dot-com bubble-burst.
“Groupon's eventual success or failure in the market may set an example for other revolutionary online start-ups, and a catastrophic entrance on Groupon's part may discourage other companies, that may benefit from a public offering, from entering the stock market eventually.”
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Transcript by Newsy.
