Is the Groupon IPO Toast?
CEO Andrew Mason threw the latest monkey wrench into his company's IPO with an ill-advised, ill-timed email.

groupon IPOThe IPO market is usually pretty exciting. Hey, it’s a way for investors to get a chance at finding the next Google (NASDAQ:GOOG) or Starbucks (NASDAQ:SBUX).

But the market also can be risky. Remember What about Webvan? Unfortunately, there are hundreds of examples of implosions.

And we might be seeing another one — that is, the Groupon IPO. Not long ago, it was considered a New Age darling. But now, it seems the offering is falling into a black hole.

According to a report in The Wall Street Journal, it looks like Groupon has cancelled its roadshow. Instead, the company plans to evaluate things on a week-by-week basis.

Of course, a key reason for the delay is the wrenching volatility in the markets. Do investors really want to take a big bet on a company like Groupon, which is losing hundreds of millions of dollars? After all, the competition is extremely fierce, with players like LivingSocial and even Google. Oh, and the Chinese market has more than 3,000 operators.

In fact, the growth rate of Groupon has been slowing down. It seems consumers are getting daily-deal fatigue. Maybe this is why Facebook and Yelp have recently pulled back their efforts in the market.

Granted, such things should not kill a deal. The fact is Groupon still is the dominant player in the space. As such, the company should be able to use its scale and brand to bolster its advantages and eventually get to profitability.

Yet there remains a big problem: Groupon’s CEO, Andrew Mason. He recently sent an email to his employees regarding the negative media attention, calling it “insane” and “hilarious.” As should be no surprise, he said Groupon was in a great position to succeed. He also indicated his support of a fancy accounting metric — called “adjusted consolidated segment operating income” — which excludes marketing costs. Keep in mind that the Securities and Exchange Commission has a different opinion on the matter and required that its use be excluded in an amended prospectus.

But there might be even more trouble from the email. You see, Groupon is in the “quiet period,” which means the CEO should not be sending out these types of emails. It actually could delay the IPO even more.

When prepping for an IPO, a CEO needs to keep his cool. He must show he is in control, especially when the company is growing at a rapid rate. This certainly has been the case with the CEOs of companies like Pandora (NYSE:P) and LinkedIn (NYSE:LNKD).

But as for Mason, his performance has been perplexing and borderline unprofessional. And it’s this kind of behavior that investors definitely will consider when making a decision on the IPO.

Tom Taulli is the author of various books, including “All About Commodities.” He does not own a position in any of the stocks named here.

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