Finally, a way to make Groupon’s shares pop: A story that suggests the company’s board is considering sacking its CEO.
The shares rose Tuesday afternoon in after-market trading as AllThingsD’s Kara Swisher reported “several board members of Groupon have been seriously discussing making major leadership changes at the Chicago-based daily deals company, including bringing in a more experienced CEO to take over for co-founder Andrew Mason.”
Ms. Swisher notes the company’s board meets later this week, but also hedges by saying “a move of replacing him is not likely to happen immediately, or at all.”
At all? You mean, he might stay? Really? This company has been a fad from the beginning and a disaster since even before its initial public offering a year ago.
Certainly, investors disregarded the company’s questionable accounting choices and troubled balance sheet when the stock debuted in November 2011: Shares traded above $31 its first day. Daily deals were the big thing, and Groupon was the industry pioneer and leader.
As they say, what a difference a year makes. The air is out of the daily-deals bubble and the company has been trying to sell the idea that it’s building the “operating system for local commerce” – or, as a July article in Bloomberg Businessweek put it, “a suite of software and technology services that would embed Groupon into every facet of every transaction on Main Street. Mason envisions consumers using Groupon as a kind of Yellow Pages to search for new ideas on where to dine or where to find the lowest prices offered by thousands of local businesses.”
A service like that already exists: Its called Google, and maybe also Yelp or OpenTable. And, those are companies whose shares aren’t down 90 per cent from their highs.
The Businessweek article shadowed Mr. Mason as he worked as a maître d’ in a Chicago sushi restaurant, doing field research for the company’s new efforts. “I didn’t realize how hard it was to run a small business,” he told the reporter.
“A Mason skeptic, and there are a great many, might say he doesn’t know how to run a large business either,” the article sagely noted.
Four months later, Groupon’s board might finally be coming around to that idea.
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