For the CEO of a company that’s supposedly going public in a few weeks, one would think Andrew Mason would be a bit more attentive to Groupon’s operations and staffing. Instead, he’s preparing for his wedding, while his company tries to scrub shady S-1 mechanisms from its forthcoming IPO, account for overseas layoffs and an upper-management shuffle that seems to suggest a lack of confidence in its founding team.
In spite of these factors, on Monday, my Reuters colleagues reported Groupon continues to pursue its September IPO as planned, after hastily switching metrics away from adjusted consolidated segment operating income accounting when investors jeered its S-1.
This ramp-up to an IPO comes as Groupon struggles to figure out how to best use its massive and growing personnel roster against its competition. For all its hiring clout, Groupon is fighting to keep up with competitors in China, and already laying off staff, one report stated.
Never mind the foreign business, Groupon is even switching up the upper management deck chairs as it prepares to set sail on public markets. Yesterday, Reuters revealed that Groupon is also replacing its sales chief Darren Schwartz with UK managing director Christopher Muhrd, signifying stateside difficulties, too.
Staffing woes can’t get you down? Consider the take of one analyst, who points to Groupon’s money-losing ways and suggested valuations of up to $25 billion, and believes the company could be going public overweight.
Given the mega-IPO hype that has surrounded other Internet and e-commerce companies, investors may well shrug off red flags in the weeks leading up to Groupon’s going public—whenever that comes—and buy into its massive reach, growing clout and the belief that scale translates to profit in the daily deals business.
What investors in Groupon should watch most, perhaps, is the groom-to-be. Already, Mason and other Groupon founders have jettisoned chunks of stock via stake sales through new money. Our Reuters colleagues astutely pointed out that the daily deal king of Chicago hasn’t yet mentioned in his company’s documents for its $750 million IPO whether he will sell more stock. If he goes to sell even more, investors ought not believe he needed the dough to spring for a top-notch honeymoon.