The Bankwatch

Tracking the consumer evolution of financial services

Groupon efforts to give a bad name to accounting are caught out

The Groupon situation continues to deteriorate.  As noted earlier, their financial forecasts were full of holes.  Now they are altering their revenue forecast to reflect the earlier fiction of gross income which is now restated to reflect payments to merchants. 

If a groupon costs $10 then $5 +/- is paid to the merchant.  Previously Groupon claimed $10 as revenue.  Their restated S-1 to the SEC reflects real revenue as $5 in this example.

Who knows if they will even make IPO.  There is so much insidiousness about this company.  Their last raise was designed to pay out investors and founders.  Not a good sign.

Written by Colin Henderson

September 25, 2011 at 01:27

Posted in Uncategorized

3 Responses

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  1. It strikes me as a deperate business in so many ways, fueled by the moronic ‘I missed out on the first tech bubble’ mania.

    Its actually very simple. Ask ANYONE who has done a Groupon as a company whether they would do it again. Then ask again. If you get 3 out of 10 answers back saying ‘yes’ than it might justify a sum equivalent to what it is: a big shed of students, rapidly pulled together,ty, to do cold calling to the entire SME database of the US. Hopefully before the other 5 guys do. The entire ‘senior’ team is clearly assembled on massive options upsides to give credibility before the who thing bursts like bad acne.

    The accounting is a disgrace, pure and simple. Somebody is making enormous fees on this puffed up flake of a company.

    If its smells fishy it probably is…..


    September 29, 2011 at 15:19

    • On the other hand I may just be jealous I didn’t think of it……lol!

      September 29, 2011 at 15:21

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