A Groupon Inc. (GRPN) shareholder sued the deal-of-the-day coupon company, claiming that its officers, directors and underwriters misled investors about its business performance prior to its initial public offering.
“Groupon’s internal controls were so poor and inadequate that Groupon’s reported results were not reliable,” investor Fan Zhang alleged in a complaint filed today in federal court in Chicago.
Zhang seeks class-action -- or group -- status on behalf of anyone who bought Groupon stock from Nov. 4 to March 30, and an award of unspecified money damages. Zhang owned as many as 3,000 shares from Feb. 9 to March 6, bought for as much as $21.75.
I have read some very good analysis of Groupon recently - disclosure looks very poor, and the business model does not look sustainable. The founder selling heavily so soon after the IPO suggests he knows its not sustainable.
Definitely one to watch, and Zhang probably has a good chance