Feeds

Shareholder flings class action lawsuit at Groupon

Alleges site tricked investors into buying stock

Secure remote control for conventional and virtual desktops

The hits keep on coming for Groupon, as it now faces a shareholder lawsuit on top of another day of falling stocks, all over its materially weak accounting.

Groupon shares dropped another few per cent in New York trading yesterday and now sit at their lowest point ever: $15.02.

The stocks have been losing ground since the company had to restate its fourth quarter results at the end of last week due to something of an overstatement of its revenues and an understatement of its losses.

Rather foolishly, the daily deals site forgot that if it offered higher-priced deals, it should really keep back enough money to cover any possible refunds, which pushed its losses higher.

The Securities and Exchange Commission is already probing the incident, since the regulator is none too pleased with newly public companies messing up their accounts, and now a shareholder has launched a lawsuit over the snafu.

Investor Fan Zhang started the class action lawsuit for himself and others, alleging that Groupon's dodgy accounting practices had tricked investors into buying stocks.

"Defendants failed to disclose negative trends in Groupon’s business and made false statements as to Groupon’s financial results," Zhang's court filing read.

"As a result of these false statements, defendants were able to successfully accomplish Groupon’s IPO at $20.00 per share, and subsequently Groupon’s stock traded at artificially inflated prices… reaching a high of $26.19 per share on November 18, 2011."

The shareholder is looking for damages, interest, lawyer fees and anything else the court might award him and his fellow investors.

The Reg has contacted Groupon, which said it had no comment to make on the matter. ®

Choosing a cloud hosting partner with confidence

More from The Register

next story
Bono apologises for iTunes album dump
Megalomania, generosity and FEAR of irrelevance drove group to Apple deal
HBO shocks US pay TV world: We're down with OTT. Netflix says, 'Gee'
This affects every broadcaster, every cable guy
Facebook, Apple: LADIES! Why not FREEZE your EGGS? It's on the company!
No biological clockwatching when you work in Silicon Valley
French 'terror law' declares WAR on the INTERNET itself, say digi-rights folks
Liberté, Égalité, Fraternité: Two out of three ain't bad
SCREW YOU, EU: BBC rolls out Right To Remember as Google deletes links
Not even Google can withstand the power of Auntie
Arab States make play for greater government control of the internet
Nerds told to get lost in last-minute power grab bid at UN meeting
Zippy one-liners, broken promises: Doctor Who on the Orient Express
Series finally hits stride, but Clara's U-turn is baffling
Don't bother telling people if you lose their data, say Euro bods
You read that right – with the proviso that it's encrypted
America's super-secret X-37B plane returns to Earth after nearly TWO YEARS aloft
674 days in space for US Air Force's mystery orbital vehicle
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.
Win a year’s supply of chocolate
There is no techie angle to this competition so we're not going to pretend there is, but everyone loves chocolate so who cares.
Why cloud backup?
Combining the latest advancements in disk-based backup with secure, integrated, cloud technologies offer organizations fast and assured recovery of their critical enterprise data.
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Saudi Petroleum chooses Tegile storage solution
A storage solution that addresses company growth and performance for business-critical applications of caseware archive and search along with other key operational systems.