Groupon’s triple-digit growth has slowed, slicing Groupon’s valuation in half — if not more. Analysts now suggest the valuation will be lucky to be more than $10 billion. A series of accounting and disclosure gaffes have brought the attention of the Securities and Exchange Commission, raising questions about the company’s credibility.
The history of Groupon’s chairman, Eric Lefkofsky, was also unearthed, showing a lawsuit-prone entrepreneur who flipped a dot-com company in 1999 only to have it lead to bankruptcy a year later for the firm he had sold it to. And Groupon’s filing shows that when the company privately raised $950 million in a pre-I.P.O. round in January, it paid out $810 million of that to its investors and employees, a red flag for any investor. (Mr. Lefkofsky and his wife took home about $319 million of the total.)
All of this raises an obvious question: How did so many Wall Street firms desperate to underwrite the Groupon I.P.O. miss these warning signs when pitching such a sky-high valuation? Or did they just turn a blind eye?
Said a while back here it was a scam..they turned a blind eye..what is coming to light isn't hot news ..it was just better suppressed 'til now..but many knew..especially those involved in hyping and running the IPO.
engine
4:55 pm on Oct 18, 2011 (gmt 0)
What I'm not keen on is the part where there is a frenzy by people in the money business, and it continues to run ahead. If it were their own personal money I think the figues would be tempered considerable.
Leosghost
5:06 pm on Oct 18, 2011 (gmt 0)
Or if their bonuses or salaries had to be paid back when their gambles with other peoples money didn't pay off..
Or better yet when their knowing and active participation in scams, actually resulted in serious jail time for all of them instead of just the occasional one of them like madoff..
That isn't going to happen though, not while their friends and family write the laws and judge the transgressors.
