Feeds

Regulator probes Groupon as shares tumble

SEC looking into daily deal site's accounting snafu

Providing a secure and efficient Helpdesk

Daily deals site Groupon has seen its stocks tumble nearly 17 per cent, after mistakes in its fourth quarter results announcement forced the firm to issue a revision over the weekend.

Groupon shares finished US trading on Monday down 16.89 per cent to $15.27, meaning its stock has now fallen 41.5 per cent from its debut close at $26.11 just five months ago.

The coupon-pusher said that it had to restate its fourth quarter results, pushing up its loss in that quarter, because it hadn't accounted for the fact that higher-priced deals meant it had to put aside extra cash for possible refunds.

The company said it was taking measures to address the "material weakness" in its financial controls.

However, the Wall Street Journal reported that the Securities and Exchange Commission had launched an investigation into the snafu, according to a person familiar with the situation.

That person also whispered that the probe was in its preliminary stages and the SEC hadn't decided whether it would turn into a formal investigation or not.

Companies' financial reporting is usually closely monitored by the stock market regulator after they first go public, to make sure they're getting their sums right and playing it straight with investors.

The commission has already had to step in with Groupon before its stocks went live, when its initial public offering prospectus listed a controversial accounting metric that the SEC asked the firm to remove. The metric, ACSOI, listed income before marketing and acquisition costs, a figure that was far higher than its true income, since marketing is Groupon's largest outgoing.

Groupon's IPO ended up priced at $20 a share, valuing the company at almost $13bn, despite critics worrying that the firm's business model was untested and that it had yet to turn a profit.

The daily deals site is sticking with its forecast of a $15m to $35m operating profit for the first quarter of this year, a prediction that will be proved, or not, at the start of May. ®

Beginner's guide to SSL certificates

More from The Register

next story
Scrapping the Human Rights Act: What about privacy and freedom of expression?
Justice minister's attack to destroy ability to challenge state
WHY did Sunday Mirror stoop to slurping selfies for smut sting?
Tabloid splashes, MP resigns - but there's a BIG copyright issue here
Hey Brit taxpayers. You just spent £4m on Central London ‘innovation playground’
Catapult me a Mojito, I feel an Digital Innovation coming on
Google hits back at 'Dear Rupert' over search dominance claims
Choc Factory sniffs: 'We're not pirate-lovers - also, you publish The Sun'
EU to accuse Ireland of giving Apple an overly peachy tax deal – report
Probe expected to say single-digit rate was unlawful
Inequality increasing? BOLLOCKS! You heard me: 'Screw the 1%'
There's morality and then there's economics ...
While you queued for an iPhone 6, Apple's Cook sold shares worth $35m
Right before the stock took a 3.8% dive amid bent and broken mobe drama
EU probes Google’s Android omerta again: Talk now, or else
Spill those Android secrets, or we’ll fine you
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Storage capacity and performance optimization at Mizuno USA
Mizuno USA turn to Tegile storage technology to solve both their SAN and backup issues.
The next step in data security
With recent increased privacy concerns and computers becoming more powerful, the chance of hackers being able to crack smaller-sized RSA keys increases.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
A strategic approach to identity relationship management
ForgeRock commissioned Forrester to evaluate companies’ IAM practices and requirements when it comes to customer-facing scenarios versus employee-facing ones.