Feeds

Regulator probes Groupon as shares tumble

SEC looking into daily deal site's accounting snafu

Build a business case: developing custom apps

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. ®

5 things you didn’t know about cloud backup

More from The Register

next story
Kate Bush: Don't make me HAVE CONTACT with your iPHONE
Can't face sea of wobbling fondle implements. What happened to lighters, eh?
Assange™: Hey world, I'M STILL HERE, ignore that Snowden guy
Press conference: ME ME ME ME ME ME ME (cont'd pg 94)
Video of US journalist 'beheading' pulled from social media
Yanked footage featured British-accented attacker and US journo James Foley
Caught red-handed: UK cops, PCSOs, specials behaving badly… on social media
No Mr Fuzz, don't ask a crime victim to be your pal on Facebook
Ballmer leaves Microsoft board to spend more time with his b-balls
From Clippy to Clippers: Hi, I see you're running an NBA team now ...
Online tat bazaar eBay coughs to YET ANOTHER outage
Web-based flea market struck dumb by size and scale of fail
Amazon takes swipe at PayPal, Square with card reader for mobes
Etailer plans to undercut rivals with low transaction fee offer
Call of Duty daddy considers launching own movie studio
Activision Blizzard might like quality control of a CoD film
US regulators OK sale of IBM's x86 server biz to Lenovo
Now all that remains is for gov't offices to ban the boxes
prev story

Whitepapers

5 things you didn’t know about cloud backup
IT departments are embracing cloud backup, but there’s a lot you need to know before choosing a service provider. Learn all the critical things you need to know.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.