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To: stockman_scott who wrote (233)	4/12/2012 10:24:11 AM
From: Glenn Petersen	1 Recommendation of 364

Groupon accounting problems put spotlight on board Audit committee in focus after earnings revised Reuters 6:49 AM CDT, April 12, 2012 Groupon Inc., the online coupon company that floated just months ago in the strongest IPO in years, has had recurring accounting problems that critics say show a need for more financial sophistication on its board. Groupon revised its fourth-quarter results last month, its first results posted as a public company, trimming revenue by $14.3 million. The company also said it found a material weakness in controls over its financial statements. Fast-growing Groupon has said the latest accounting problems stemmed from a move into higher priced coupons, which led to more customer returns and refunds than anticipated. The company sells discounted coupons online, keeping part of the money that customers pay for the coupons, with the rest going to participating merchants. Groupon has asked an external auditor to look into the causes of its internal control weakness and has said it will beef up its own finance staff. But corporate governance experts questioned the financial background of the Groupon board's audit committee, which is supposed to oversee both its auditor and the company's own accountants. Groupon spokesman Paul Taaffe said the audit committee has met regularly to address accounting issues since the company discovered in February that the refund rate had increased. Committee members "were in contact with each other, the audit firm and management continuously," he said. Members of the audit committee declined comment. Groupon already had been criticized by some analysts and investors for aggressive accounting before it went public in November. Under questioning by the U.S. Securities and Exchange Commission and accounting experts, Groupon changed its accounting practices twice before the initial public offering. 'MORE FINANCIAL EXPERTISE' "Groupon needs a new audit committee with much more financial expertise," said James Post, a management professor at Boston University. Some accounting experts said it would have been daunting to estimate the reserves needed for refunds. "In a new business it's difficult to evaluate, because you don't know the behavior of your customer," said Wendy Stevens, a partner at accounting firm WeiserMazars. Groupon's rapid growth also made it difficult to keep tabs on internal controls, accounting experts said. The company has expanded to 45 countries since it was launched in Chicago in 2008 and has increased its employees from a handful to 10,000. With that much growth "there is little doubt that internal controls are not working somewhere," Edward Ketz, an accounting professor at Pennsylvania State University, and Anthony Catanach, an accounting professor at Villanova University, wrote in a blog post last week. Groupon's audit committee is not lacking business experience. It includes heavy-hitters such as Howard Schultz, chief executive of Starbucks Corp. Its audit committee chairman, Ted Leonsis, is a former AOL executive and chief executive of Monumental Sports & Entertainment, owner of several professional sports teams. The third member, Kevin Efrusy, is an entrepreneur and founder of IronPlanet, an online market for heavy equipment. CEOs are a plus for audit committees because they have the stature to ask tough questions of a company's management and auditors, corporate governance experts said. But they can be overburdened in the role of audit committee chairman, one of the most demanding on a corporate board. Heading Groupon's audit committee is not Leonsis's only board duty. He is also on the technology committee of Alcatel-Lucent SA and the boards of Clearspring Technologies, American Express Co, Rosetta Stone Inc , NutriSystem Inc, Georgetown University and two charities, according to a bio on Monumental's website. A spokesman for Leonsis declined comment. AUDIT PANEL ENGAGED Groupon spokesman Taaffe said the committee has been fully involved in overseeing the company's accounting, from its IPO through the earnings revision. The committee was also involved in a decision to bring in a team of actuaries who created a new model to better estimate future customer refunds, he said. Meanwhile, legal headaches are mounting as investors try to recover losses. Groupon's directors, including its audit committee, have been named as defendants in multiple lawsuits filed against the company since it disclosed its control weaknesses on March 30.. Groupon's shares are down by more than a third from their IPO price of $20, closing at $13.08 on Wednesday on Nasdaq. Shoring up audit committees was a key goal of 2002's Sarbanes-Oxley accounting reform act, passed by Congress after accounting scandals at WorldCom and Enron. To make audit committees better financial watchdogs, the act required them to be independent from management and made clear they had the authority to hire their own accounting advisers. Nasdaq, where Groupon is listed, requires at least one audit panel member to have "financial sophistication," either from experience in finance or accounting, or comparable experience. But Nasdaq says that requirement can be met by someone meeting the SEC's definition of "financial expert," a term broadened in final SEC rules issued in 2003. Originally limited to people with accounting or finance experience, the SEC changed the rules to include chief executives who had supervised finance or accounting staff. Groupon has said Leonsis meets the SEC's definition of a financial expert. EX-CFOs OR AUDITORS FAVORED Even so, Groupon would benefit from having at least one person on the audit committee with deeper finance experience, such as an accountant or chief financial officer, corporate governance experts said. "It is best practice to have at least one such director on the audit committee, as not having such expertise has been shown to lead to the very problems experienced by Groupon," said Paul Hodgson, senior research associate at GMI Ratings, a corporate governance ratings agency. The rules for audit committee qualifications need to be tightened, said Dennis Beresford, an accounting professor at the University of Georgia. "It would be better for companies to have someone who can speak accounting and auditing, speak GAAP and GAAS," he said, referring to generally accepted accounting principles and generally accepted auditing standards. Many companies follow the original intent of Sarbanes-Oxley and have at least one person with accounting or financial experience, said Charles Elson, director of the center for corporate governance at the University of Delaware. "That's why you see so many retired auditors on audit committees these days, or retired chief financial officers," he said. But that is no guarantee that the committee will ferret out problems. "Just because you have a financial expert on the committee doesn't mean problems don't occur," Elson added. Copyright © 2012, Chicago Tribune chicagotribune.com

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To: stockman_scott who wrote (235)	4/21/2012 7:00:32 PM
From: Glenn Petersen	1 Recommendation of 364

As Stock Continues Dive to All-Time Lows, Can Groupon Regain Investor Confidence? Tricia Duryee All Things D April 18, 2012 at 3:27 pm PT Groupon’s stock continued a downward spiral three weeks after it revised its fourth-quarter results to account for higher than expected returns during the holiday period. Friday, shares of the Chicago-based deals site closed at a new low of close to $11. At that price, it is now worth just over $7 billion, down 57 percent since the company went public last November and well off the more than $10 billion it was valued at as tech’s hottest start-up of 2011. Ironically, Groupon’s current market valuation is actually not much more than the $6 billion offered for it by search giant Google in late 2010. The fall for Groupon has been swift, from the honorific of being the fastest-growing company ever to one that cannot keep control of that runaway growth. That’s perhaps no surprise. Perhaps most significantly, Groupon went public in just four years, delivering the biggest tech IPO since Google. The quicksilver move was typical for it. In just two years’ time, the company ballooned from 37 employees to 9,625 and from serving five markets in the U.S. to 175 in North America alone. And that’s leaving out massive expansion abroad. In the past year, Groupon has acquired roughly 17 companies, including many international copycats. The company also has entered many new segments, expanding from selling lower-priced and simpler deals on restaurants and spas to more complex and pricey arenas, including travel, physical goods and luxury items. But Groupon is now learning that its original business does not work across just any segment, especially to more discerning customers of its higher-level and more expensive offerings. In fact, it was those newer and potentially more lucrative markets that forced the company to recently revise the company’s fourth-quarter report after returns skyrocketed on luxury items, such as Lasik eye surgery. The problems forced Groupon to lower revenue in the period by $14.3 million and net income by $22.6 million. It is now reporting a wider net loss of $64.9 million on revenue of $492 million, pushing it further away from its goal of profitability. The company also disclosed at the time that independent auditors had noted “material weakness” in its financial controls. In addition, the The Wall Street Journal reported that the Securities and Exchange Commission was examining Groupon’s revision. With many companies, investors might have shrugged such accounting issues off, but the impact on the stock has been greater since they are only the latest in a string of similar mistakes at Groupon. In its pre-IPO period, for example, Groupon was forced to restate revenues after counting both its portion of the revenue and the revenue that goes to the merchant together. It also had to dump a controversial accounting metric that made the company look more profitable than it was, because it did not include important costs, such as critical online marketing expenses to attract new customers. Those came after the company retracted a statement by Eric Lefkofsky, Groupon’s co-founder and executive chairman, who told Bloomberg in an interview that Groupon would be “wildly profitable.” At least the wild part was accurate. Much of the blame for these missteps by Wall Street is being aimed at CEO and co-founder Andrew Mason, the iconoclastic 31-year-old entrepreneur who is largely responsible for defining the company’s culture, as well as Jason Child and Joe Del Preto, the chief financial and accounting officers, respectively. Child joined the company in December 2010, coming from Amazon, where he held several roles over a 10-year period — including VP of finance, international, and director of investors relations. Prior to joining Amazon, he worked at Arthur Andersen as a certified public accountant. Del Preto has been Groupon’s chief accounting officer for the past year and, before that, he was the company’s global controller for three months. Before Groupon, he was controller and VP of finance at Echo Global Logistics and also served as controller at InnerWorkings, the same company where Mason was a computer programmer in his early career. Mason, of course, is the best known and the person most responsible for establishing the company’s whimsical culture and managing — or mis-managing, depending to how you look it it — Groupon’s hard-charging growth. It will also be up to him to turn it all around, as the company sinks in both value and investor regard. Since the restatement, Mason has said little about how he intends to do that. In February, when Mason concluded Groupon’s first-ever earnings call, he said: “Thanks, guys, this was a lot of fun, and I look forward to many more of these.” It’s not clear fun will be on the agenda at his next outing on Groupon’s first-quarter call in mid-May. But, let it be said that Mason is also well aware of the risks. He’s framed and hung in the lobby at the company’s Chicago headquarters a number of gushing magazine articles from the tech boom about once high-flying companies, such as Myspace and Napster, that later faded. Mason said he did so as reminder of how not to build a company. And, to emphasize that point, a cover of his own grinning visage sits right in the center of them all. allthingsd.com

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To: JakeStraw who wrote (238)	4/26/2012 5:24:02 PM
From: Glenn Petersen	of 364

While I recognize that a lot of Groupon's problems are growth related, Mason needs to step down from day-to-day operations and also bring in another CFO. Adult supervisors worked well for Google and eBay. Groupon Hires Ex-Amazon Exec Kal Raman for Adult Supervision Tricia Duryee TechCrunch April 26, 2012 at 1:20 pm PT Groupon has hired Kal Raman to build out the company’s internal controls and processes, which have come under scrutiny after several recent gaffes. Raman, who has held executive roles at Amazon, eBay and Drugstore.com, will be the SVP of Americas, overseeing the company’s operations in the hemisphere. In a phone interview, Raman, 43, laughed when asked whether he was going to act as the company’s adult supervision. ”It’s not about the age, it’s about the experience,” he said. “I have bought into the online revolution from day one.” Raman most recently founded GlobalScholar, which was acquired early last year by Scantron. For the past few months, he has been acting as eBay’s general manager of Global Fulfillment. He’s also held roles at Amazon and held the title of CEO at Drugstore.com. Raman is expecting to relocate from Seattle to Chicago for the job. In the new position, he will be charged with putting into place the company’s processes and internal controls, which have come under criticism after Groupon was forced to revise its fourth-quarter earnings due to higher than expected returns. Since then, the company has struggled to maintain investor confidence and has watched its stock fall more than 40 percent. The company’s growth has been tremendous, leaping from 37 employees to 9,625 in just two years. Since the restatement, this is the first big move that hints that the company has plans to right its course. In response to a question about Groupon’s need for stricter controls, Raman was fairly blunt. Yes, it’s a problem, he said, but “it’s a high-quality problem to have,” preferable to having a company that “is totally under control and no growth.” In a statement, Groupon’s CEO Andrew Mason, said: “Kal brings e-commerce and operational experience to Groupon which will benefit our customers and our merchants as we set out to become the operating system for local business.” allthingsd.com

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To: stockman_scott who wrote (235)	4/30/2012 5:15:50 PM
From: Glenn Petersen	1 Recommendation of 364

As anticipated: Confirmed: Schultz and Efrusy to Leave Groupon Board; “Accounting Types” Joining Kara Swisher All Things D April 30, 2012 at 12:40 pm PT According to sources close to the situation, Starbucks Chairman and CEO Howard Schultz and Accel Partners’ Kevin Efrusy will be stepping down from the board of Groupon. Schultz’s departure will be effective today, but Efrusy — who was critical to the initial funding around the Chicago-based daily deals site — will not be standing for re-election at the company’s annual meeting in June. The departures are voluntary, but sources said the pair will be replaced by two new directors with significantly more fiscal oversight experience, whom one source characterized as “accounting types.” (Update: Groupon just posted a press release noting the board departures, with the names of the new board pencil pushers: Daniel Henry, CFO of American Express, and Deloitte Vice Chairman Robert Bass. Henry joins immediately in Schultz’s place. Full press release below.) It is a move that is critical given Groupon’s recent series of missteps around its financial reporting that have hurt both its reputation and, more importantly, its stock. Interestingly, several sources noted that Schultz almost left the board right before Groupon’s public offering last fall, after several ongoing disputes with its management, but stayed on so as not to scuttle its IPO. The board of the company has not involved itself as prominently in the accounting messes at the company, but it appears as if they will begin to now. It must, given Groupon shares have been trading at a low of $11. Its stock has dipped to $10.98 today. As Tricia Duryee wrote recently about the fall: At that price, it is now worth just over $7 billion, down 57 percent since the company went public last November and well off the more than $10 billion it was valued at as tech’s hottest start-up of 2011. Ironically, Groupon’s current market valuation is actually not much more than the $6 billion offered for it by search giant Google in late 2010. The fall of Groupon has been swift, from the honorific of being the fastest-growing company ever to one that cannot keep control of that runaway growth. That’s perhaps no surprise. Perhaps most significantly, Groupon went public in just four years, delivering the biggest tech IPO since Google. The quicksilver move was typical for it. In just two years’ time, the company ballooned from 37 employees to 9,625 and from serving five markets in the U.S. to 175 in North America alone. And that’s leaving out massive expansion abroad. In the past year, Groupon has acquired roughly 17 companies, including many international copycats. The company also has entered many new segments, expanding from selling lower-priced and simpler deals on restaurants and spas to more complex and pricey arenas, including travel, physical goods and luxury items. But Groupon is now learning that its original business does not work across just any segment, especially to more discerning customers of its higher-level and more expensive offerings. In fact, it was those newer and potentially more lucrative markets that forced the company recently to revise the company’s fourth-quarter report after returns skyrocketed on luxury items, such as Lasik eye surgery. The problems forced Groupon to lower revenue in the period by $14.3 million and net income by $22.6 million. It is now reporting a wider net loss of $64.9 million on revenue of $492 million, pushing it further away from its goal of profitability. The company also disclosed at the time that independent auditors had noted “material weakness” in its financial controls. In addition, The Wall Street Journal reported that the Securities and Exchange Commission was examining Groupon’s revision. With many companies, investors might have shrugged off such accounting issues, but the impact on the stock has been greater since they are only the latest in a string of similar mistakes at Groupon. In its pre-IPO period, for example, Groupon was forced to restate revenues after counting both its portion of the revenue and the revenue that goes to the merchant together. It also had to dump a controversial accounting metric that made the company look more profitable than it was, because it did not include important costs, such as critical online marketing expenses to attract new customers. Those came after the company retracted a statement by Eric Lefkofsky, Groupon’s co-founder and executive chairman, who told Bloomberg in an interview that Groupon would be “wildly profitable.” At least the wild part was accurate. Much of the blame for these missteps by Wall Street is being aimed at CEO and co-founder Andrew Mason, the iconoclastic 31-year-old entrepreneur who is largely responsible for defining the company’s culture, as well as Jason Child and Joe Del Preto, the chief financial and accounting officers, respectively. Child joined the company in December 2010, coming from Amazon, where he held several roles over a 10-year period — including VP of finance, international, and director of investors relations. Prior to joining Amazon, he worked at Arthur Andersen as a certified public accountant. Del Preto has been Groupon’s chief accounting officer for the past year and, before that, he was the company’s global controller for three months. Before Groupon, he was controller and VP of finance at Echo Global Logistics and also served as controller at InnerWorkings, the same company where Mason was a computer programmer in his early career. Mason, of course, is the best known and the person most responsible for establishing the company’s whimsical culture and managing — or mismanaging, depending on how you look at it — Groupon’s hard-charging growth. It will also be up to him to turn it all around, as the company sinks in both value and investor regard. Since the restatement, Mason has said little about how he intends to do that. In February, when Mason concluded Groupon’s first-ever earnings call, he said: “Thanks, guys, this was a lot of fun, and I look forward to many more of these.” It’s not clear fun will be on the agenda at his next outing on Groupon’s first-quarter call in mid-May. Groupon Appoints Two Directors to Board Daniel Henry, CFO of American Express, and Robert Bass, Vice Chair of Deloitte CHICAGO — (BUSINESS WIRE) — Groupon, Inc (http://www.groupon.com) (NASDAQ:GRPN) today announced that Daniel Henry, the chief financial officer of American Express Company and Robert Bass, a vice chairman of Deloitte LLP will join its Board of Directors. Both will serve on the Audit Committee with Audit Chair, Ted Leonsis. Daniel Henry was appointed to the Board on April 26, replacing Howard Schultz, who has stepped down from the Board. Robert Bass will stand for election at the annual stockholder meeting to be held on June 19 following his retirement from Deloitte, replacing Kevin Efrusy, who will not stand for reelection at that time. “With their deep financial, accounting and operational experience, Dan and Bob will provide invaluable expertise to the Board going forward,” said Eric Lefkofsky, Groupon Chairman. Daniel Henry, 62, has been the Chief Financial Officer of American Express Company since October 2007. Henry is responsible for leading American Express Company’s finance organization and representing American Express to investors, lenders and rating agencies. He has also served as Executive Vice President and Chief Financial Officer of U.S. Consumer, Small Business and Merchant Services and joined American Express as Comptroller in 1990. Prior to joining American Express, Henry was a partner with Ernst & Young. Robert Bass, 62, has been a vice chairman of Deloitte LLP since 2006, and a partner in Deloitte since 1982. He will retire from Deloitte on June 2, 2012. Bass has specialized in e-commerce, mergers and acquisitions and SEC filings. At Deloitte, Bass is responsible for all services provided to Forstmann Little and its portfolio companies and is the advisory partner for Blackstone, DIRECTV, McKesson, IMG and CSC. He has also previously been the advisory partner for priceline.com, RR Donnelley, Automatic Data Processing, Community Health Systems and Avis Budget. He is a member of the American Institute of Certified Public Accountants and the New York and Connecticut State Societies of Certified Public Accountants. “I’m thrilled to have been a part of Groupon’s development,” said Kevin Efrusy. “The Company is well on its way to becoming the operating system for all local commerce.” “Howard and Kevin helped guide us on our journey to becoming a public company and I want to thank them and acknowledge their contributions,” said Groupon CEO Andrew Mason. “During my tenure on the Board, I was impressed by the game-changing opportunities that Groupon has delivered for both merchants and customers on a global scale,” said Howard Schultz. “Groupon has a strong sense of mission and purpose, and as I move on to focus on my other time commitments, I wish them the very best.” allthingsd.com

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To: stockman_scott who wrote (235)	5/5/2012 11:03:47 AM
From: Glenn Petersen	1 Recommendation of 364

CTCT is down by 25% since this piece was written (disappointing first quarter results, though not a disaster). The paired trade would have been a disaster. CTCT might be worth a look. For Investors, a Little-Known Alternative to Groupon By Karen Weise Bloomberg BusinessWeek on April 04, 2012 With Groupon once again in the headlines over questionable accounting, some investors may be hunting a daily-deal investment that doesn’t offer the periodic jolts. Constant Contact ( CTCT) hasn’t gotten as much press as Groupon ( GRPN) competitors like LivingSocial, but it may be getting new attention, with Groupon shares off 27 percent so far this year. In a blog post, Barry Randall, founder of Crabtree Asset Management, called Groupon and Constant Contact a “ pair trade,” a reference to the investing strategy of shorting one company and going long on another in the same sector. (Short interest in Groupon shares is about 60 percent higher than shorting of other Internet companies, as of March 15, according to Bloomberg data.) If you think you don’t know Constant Contact, think again. The Waltham (Mass.)-based company manages some of the e-mail lists sending newsletters and updates to your in-box on behalf of a local business, nonprofit, or neighborhood association. Constant Contact’s core business of running the back end for these group e-mails, from tracking who opens the PTA newsletter to letting people unsubscribe, made up 88 percent of the company’s $214 million in revenue in 2011. That produces a recurring monthly revenue stream from its 500,000 customers, more than two-thirds of which have fewer than 10 employees. The average Constant Contact client spends $38.22 per customer per month. The company has been seeking ways to exploit its presence in so many local organizations to move beyond e-mail lists. It’s added new ways for businesses to manage invitations and RSVPs for events and to survey their customers. A year ago it bought BantamLive, which it used to launch a new effort in January to help small businesses run social marketing campaigns on Facebook. After that announcement, investors sent the share price up more than 16 percent, the most since its initial public offering in 2007. The stock has gained 29 percent, to just under $30, this year. Earlier this year, Constant Contact bought MobManager, which helps businesses handle the back-end administration of daily deals. That let Constant Contact start SaveLocal, its push into the coupon market. “If Groupon is quantity, SaveLocal is quality,” Chief Executive Officer Gail Goodman said at an investor conference on March 5. She said Groupon’s main value to local businesses is access to the daily-deal company’s large e-mail lists, but that Groupon’s list doesn’t necessarily create customer loyalty. SaveLocal’s offering lets small businesses offer deals to their own customer base—via Constant Contact’s e-mail system—and then encourage those customers to share the deals with friends. It also lets the businesses set their own discount for the coupons instead of being forced into the 50 percent deals that are standard on Groupon. Constant Contact is also looking to build out a mobile platform for businesses. In January, it paid $5.8 million to acquire CardStar, which will eventually let Constant Contact show consumers nearby deals on their mobile phones. Groupon already has those types of apps, but then again, it may also have regulators breathing down its neck. Weise is a reporter for Bloomberg Businessweek http://www.businessweek.com/articles/2012-04-04/for-investors-a-little-known-alternative-to-groupon

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To: stockman_scott who wrote (235)	5/5/2012 11:05:57 AM
From: Glenn Petersen	1 Recommendation of 364

As Wall Street Points Fingers at Groupon, Three Fingers Point Back by Sarah Lacy pandodaily April 3, 3012 Now I know how Goldilocks felt. About the time Groupon was raising its $1 billion growth round and getting the big endorsement from some of the Valley’s biggest names, I was bringing up all the problems with its haphazard Samwer-poisoned international expansion. This lead to a lot of tense conversations with some of my best sources. For instance, my long-time friend Brandee Barker, who did PR for Groupon at the time, said of my coverage, “Wow, I’m not sure I’ve ever seen you take such a severe stab at a company.” I humbly disagreed. Given the train wreck of wasted money and lack of accountability for Groupon’s international division, I thought I was pretty fair. As a consumer, I haven’t exactly had a love affair with the company either. My husband and I have used a Groupon exactly once. And the longer the company is in business, the less relevant the deals are. “I don’t want a massage in Timbuktu, I don’t want a wax, and I don’t want my nails done,” my husband is saying right now, on one of many rants. My nanny just came in the room and added, “Are we complaining about Groupon? They email me way too much, and I don’t care about any of the deals!” But in the last few days, as Groupon’s stock falls further – just a nickel off its 52-week low in after hours trading today — the Wall Street torches and pitchforks have come out yet again for the company. And I find myself in a strange position. I’m actually defending them. (Sort of.) First off, I don’t get Andrew Ross Sorkin’s piece yesterday that Groupon is evidence why the JOBS Act is a bad move. He is talking about how the act would lead to more Groupons because of its provisions that ease regulations on investing in sub-$1 billion-in-revenue companies. That would make sense…except for Groupon had revenues of some $1.6 billion in 2011, so that change wouldn’t have made any difference at all. Sorkin makes this point, but continues with the screed nonetheless. He’s uncharacteristically missing a huge point: The reason most everyone in the Valley was in support of the JOBS act was because it eases of the 500-shareholder rule allowing companies to stay private longer. This would actually prevent more Groupons, because it would allow rapidly growing companies to put off going public as long as possible. It would allow more companies to take the far more conservative Facebook route. Both Groupon’s rapid revenue escalation and its time to IPO and are key points to what the company has been going through since it went public. Even as a fairly big Groupon critic let me be clear: Most of Groupon’s woes go back to one serious misstep. It went public years too early. There is no company in the world that goes from zero to $1 billion valuation — the fastest growing ever, gushed Forbes in 2010 — in less than two years without having serious stress fractures, business model questions, and management team issues. None. That’s like a kid growing a foot overnight and not having stretch marks and leg cramps. Even the Valley golden child Facebook had issues two years in. Think back to how many scandals Facebook has endured over its lifetime: Presumptive founders wanting payouts, privacy scandals, business model difficulties, and many, many iterations of its senior management team. Facebook spent the first few years of its existence shedding full teams of managers, like a snake annually shedding its skin, until finally it hit on the right team to lead a $100 billion company. Facebook waited for it all to come out of the closet and for all its internal issues to get solved before it invited public shareholders to the party. I’m not saying Groupon, with five or so more years as a private company, would magically turn into Facebook, far from it. But one way or another the mess of Groupon would have been sorted out with a little more dignity for the people genuinely working hard to build that company. Rest assured, Facebook going public two years in would most certainly have been a disaster. It just wasn’t ready. No company that grows that fast and establishes an entirely new market along the way is. Mark Zuckerberg most certainly wasn’t ready as a CEO. And — duh! – that’s why it didn’t file. This is what bothers me about so many Wall Street-minded people like Sorkin, now holding up Groupon as a poster child of the tech startup world’s excess and over-promises: Wall Street has no one to blame but itself. Since the dot com bust, Wall Street firms have been aggressively lobbying every single fast-growing private company to go public as soon as possible. Facebook has withstood the pressure since at least 2008. Sorkin himself detailed the wild-eyed enthusiasm with which firms pitched Groupon over the summer, desperate to take it public, in his words missing all sorts of the “red flags” in their zeal. Recently the Wall Street Journal did a bizarre post essentially calling Twitter a laggard for not being in a bigger hurry. LinkedIn, Twitter (so far), and Facebook were all smart enough not to listen to the cheesy bulge-bracket pitch and took their time. Maybe it was greed and maybe it was naiveté, but Groupon wasn’t. But that doesn’t mean it’s an “Emperor Has No Clothes” company that was actively trying to pull the wool over potential investors eyes. It just had serious problems that it should have figured out while still private. Desperate to invest in private companies while they’re still in early hyper growth? This is what you get, Wall Street. You can’t have it both ways. http://pandodaily.com/2012/04/03/as-wall-street-points-fingers-at-groupon-three-fingers-point-back/

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