Feeds

Regulator probes Groupon as shares tumble

SEC looking into daily deal site's accounting snafu

Combat fraud and increase customer satisfaction

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. ®

3 Big data security analytics techniques

More from The Register

next story
Dropbox defends fantastically badly timed Condoleezza Rice appointment
'Nothing is going to change with Dr. Rice's appointment,' file sharer promises
Audio fans, prepare yourself for the Second Coming ... of Blu-ray
High Fidelity Pure Audio – is this what your ears have been waiting for?
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Zucker punched: Google gobbles Facebook-wooed Titan Aerospace
Up, up and away in my beautiful balloon flying broadband-bot
Apple DOMINATES the Valley, rakes in more profit than Google, HP, Intel, Cisco COMBINED
Cook & Co. also pay more taxes than those four worthies PLUS eBay and Oracle
It may be ILLEGAL to run Heartbleed health checks – IT lawyer
Do the right thing, earn up to 10 years in clink
prev story

Whitepapers

Top three mobile application threats
Learn about three of the top mobile application security threats facing businesses today and recommendations on how to mitigate the risk.
Combat fraud and increase customer satisfaction
Based on their experience using HP ArcSight Enterprise Security Manager for IT security operations, Finansbank moved to HP ArcSight ESM for fraud management.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
SANS - Survey on application security programs
In this whitepaper learn about the state of application security programs and practices of 488 surveyed respondents, and discover how mature and effective these programs are.