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Entries in Groupon (27)

Thursday
Feb282013

Groupon Ousts CEO Andrew Mason

David Paul Morris/Bloomberg via Getty Images(CHICAGO) -- Online coupon site Groupon, after a series of losses and missteps, said Thursday that it is replacing CEO Andrew Mason.

Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis have been appointed to the newly created Office of the Chief Executive, effective immediately, replacing Mason, the company said in a statement.

Lefkofsky and Leonsis will serve in this role on an interim basis while the board searches for a new CEO.

Groupon shares plunged 24 percent to $4.53 Thursday in New York trading after it said Wednesday that first-quarter revenue will be just $560 million to $610 million, less than analyst forecasts of $647 million.

Demand for online discounts has waned as competitors flooded the market. Mason tried to lessen the company’s reliance on coupons, but the firm’s first year as a public company has been a disaster, with the shares down three-quarters from the IPO price of $20.50.

The fourth-quarter net loss widened to $81.1 million.

Copyright 2013 ABC News Radio

Wednesday
Jul252012

Groupon Fires Back at Shuttered Waffle Business

Scott Olson/Getty Images(WASHINGTON) -- Groupon is once again defending its business model after a shuttered waffle vendor blasted the deals service online as “money-hungry” and bad for small businesses.

Three months ago, Craig Nelsen, 52, erstwhile owner of Back Alley Waffles on Blagden Alley in Washington, D.C., opened the business to draw attention to his three-year old art gallery, which sells his mosaic artwork.

“We opened [Back Alley Waffles] with no money because the art gallery was struggling financially,” Nelsen said.

He said offering a two-for-one waffle deal through Groupon “broke our back,” causing the waffle business to close two weeks ago.  In particular, Nelsen takes issue with Groupon’s practice of distributing revenue to vendors in three payments over a 60-day period.

“It’s a bad model. I blame myself for getting into it. It’s a warning to any other small business that is trying to start up to stay clear of these guys,” he said.

Groupon spokeswoman Julie Mossler said a partnership with Groupon is not intended to give businesses a quick infusion of cash and that Nelsen was made aware that he would receive an initial payment through postal mail, then two payments after 30 and 60 days.

However, Nelsen, who received his second payment after the business closed, claimed the amount of money that would be distributed was not “clear” when he agreed to the contract.

In a statement, Groupon said: “Mr. Nelsen initially approached Groupon and our merchant advisors structured a deal to best encourage overspend and help his business grow. We also required Back Alley to cap the number of Groupons sold to ensure the feature was in the best interest of both consumers and the merchant. We scheduled his feature on his terms, on a date he selected, under a contract he reviewed and signed. According to our records, only 132 Groupons, or 18 percent sold, have been redeemed since Back Alley ran two months ago, and Mr. Nelsen has received 2/3 of his share of the revenue to date.

“We always hate to hear that a local business has decided to close, but the math does not point to Groupon as the cause.”

Mossler also pointed out that Nelsen made multiple agreements with LivingSocial and Scoutmob while offering the Groupon deal, which Groupon does not recommend.

“The 18 percent represents $2,600 worth of waffles is not much to $1.6 billion corporation like Groupon, but for someone trying to open a restaurant with no money is a huge overhang up front,” Nelsen said.

Nelsen’s art gallery is still operating because it does not require additional staff, he said. Though the waffle business failed, it seemed to reach his initial goal of drawing attention to his art.

“I got my first commission in the last week,” Nelsen said. “That was really encouraging.”

Groupon, for its part, has struggled since going public, with its shares falling 72 percent since its Nov. 7 debut to $7.31 each.

Copyright 2012 ABC News Radio

Wednesday
Jul112012

Groupon’s Stock Plunges

Scott Olson/Getty Images(NEW YORK) -- Not a great deal for Groupon’s investors: The company's stock dove down to $7.77 on Wednesday, when their initial public offering price was $20 a share, according to the New York Times.

Since going public, the Groupon has fallen 70 percent.  Its chairman, Eric Lefkofsky recently stated he was going to focus on his own investment firm and cut back on his duties at the company.

Groupon is a website that offers deal-of-the-days with discounted gift certificates used at national and local companies.

Copyright 2012 ABC News Radio

Wednesday
Jun132012

Groupon Offers to Name Babies for $1,000

Scott Olson/Getty Images(CHICAGO) -- Groupon has a solution for expecting parents struggling to find an original name for their child: let the daily-deal website handle it for $1,000.

The name will not be randomly selected nor will it be generated from a personal questionnaire. It will be Clembough.

"No substitutes or modifications. Spelling non-negotiable. Any attempt to name your child 'Clembough' independent of this exclusive Groupon will be recognized by the world as a cheap imitation," the deal's fine print reads.

The baby-naming deal prompted media speculation about whether this deal was simply a publicity stunt in anticipation of Father's Day, which is June 17.

In response to a suspicious user on the deal's Q&A section, a Groupon copywriter wrote, in the company's standard tongue-in-cheek manner, "This is the most serious deal that Groupon has ever seriously run in its serious history."

On a more serious note, Julie Mosser, a Groupon spokeswoman, said the deal is absolutely real, and at least one person has accepted it.

The deal comes just a week after a different Groupon deal sparked similar bewilderment: for $100, Groupon employee Ben Kobold offered to tuck customers in and sing them "one of the five lullabies he has authored" in their homes. That deal was alternately hailed as a source of needed levity and criticized as downright creepy.

Launched in November 2008, Groupon offers one discount deal a day in each market it serves. As of 2011, Groupon was operating in 500 markets in 44 countries.

The Chicago-based company issued shares last November. The shares have fallen by 62 percent to $9.77.

Copyright 2012 ABC News Radio

Monday
Jun042012

Groupon's Latest Deal: Tuck-In Service, Personal Lullaby

Groupon(CHICAGO) -- Attention Chicagoans! Time is running out to get your hands on some personal bedtime service.

Imagine this: For just $100, someone will come to your home, gently tuck you in to bed, deliver you a drink (of water), and even perform for you an original lullaby.

While it may sound fishy, rest assured. The daily deals site Groupon – which is hosting the ad – says this bedtime butler is no slouch; in fact, he comes with 28 years of experience; and they would know. The man at the other end of Groupon’s latest deal is the company’s very own Ben Kobold, one of the site’s writers, according to his LinkedIn page.

“Upon entering your bedroom, Ben Kobold immediately begins to analyze your linen seams and pillow placement, planning a tucking strategy as you enjoy a glass of water he has poured for you,” the Groupon ad reads. “After you hydrate, Ben’s sinewy, well-groomed fingers delicately raise each sheet and blanket over your body until you’re comfortably bundled.

“Careful not to disturb any children who may be in the adjacent room, Ben leans in and uses his summer-breeze-like voice to gently sing you one of the five lullabies he has authored,” the advertisement continues. “Once your body temperature has fallen and your breathing has slowed, Ben and his legally required entourage of two or three companions will slip soundlessly out the front door and into the night. He’ll return to his sleeping barracks, where he’ll tuck himself in and whisper his lullabies to himself.”

The site is known for its daily deals -- so where, you ask, is the deal in this particular offer?

“This is a unique experience created just for Groupon that does not have an original value for us to discount,” a Groupon rep identified as Patrick S. said in response to one user’s inquiry.

So this is all a joke, right? Perhaps a publicity stunt meant to draw laughs as the company's value continues to trend downward? Judge for yourself: “This is the most serious deal that Groupon has ever seriously run in its serious history,” the same rep said in response to another question.

For now, the "deal" is set to expire Wednesday night.

Copyright 2012 ABC News Radio

Monday
May282012

Groupon Customers Stand by on Settlement Refund

Photo by Scott Olson/Getty Images(NEW YORK) -- A class-action lawsuit might result in a refund for Groupon customers who purchased deals from the company between Nov. 1, 2008, and Dec. 1, 2011.

Chicago-based Groupon notified customers Friday of a proposed $8.5 million settlement after more than a dozen lawsuits in several courts claimed, for instance, that Groupon vouchers had illegal and undisclosed expiration dates and restrictions.

Among the claims is that some of the wording under question in Groupon’s fine print was alleged to have violated a federal gift-card law that prohibits selling gift cards that expire in less than five years.

The class-action settlement website, GrouponVoucherSettlement.com, states that plaintiffs accused Groupon vouchers of containing “expiration dates and other restrictions in violation of federal and state law and challenged statements on [vouchers] and in terms of use and terms of sale on Groupon’s website used in connection with the offering or sale of [vouchers].”

Website customers who would like to participate must submit a claim form to receive a settlement voucher. The amount to be refunded has yet to be determined.

A judge must approve the proposed settlement during a final approval hearing July 20. Groupon, which established the $8.5 million settlement fund to issue refunds, less plaintiffs’ attorneys’ fees and costs,  has not admitted fault  by agreeing to the proposed settlement.

Customers who object to the settlement, including the requested attorney’s fees, and decide to opt out of the settlement must file with the U.S. District Court for the Southern District of California by July 6. That would permit them to pursue their own legal action against Groupon.

Julie Mossler, a spokeswoman for Groupon, said the company does not comment on litigation.

Copyright 2012 ABC News Radio

Thursday
Feb092012

Groupon Shares Plunge After Fourth-Qtr. Loss

Scott Olson/Getty Images(CHICAGO) -- Shares of deal site Groupon plunged Thursday morning after the firm reported another quarterly loss when analysts had expected a profit.

Groupon, which first sold shares to the public Nov. 4 at $20 each, said after the markets closed Wednesday that the fourth-quarter loss was 2 cents per share, compared with a loss of 53 cents a year earlier. Sales, though, soared to $506.5 million from $172.2 million.

The firm spent $156.5 million to attract users of its coupons, which offer discounts on goods and services through local retailers. Costs to set up a new international headquarters in Switzerland led to an extra $34.8 million in taxes, wiping out any chance of a profit for the quarter.

Groupon says it has over 33 million active users as of the fourth quarter.  The company launched in November 2008 and despite its popularity, has never made a profit.

Its shares fell 10 percent to $22 in trading at the market open.

Copyright 2012 ABC News Radio

Wednesday
Nov232011

Groupon’s Stock Discounted Below IPO Price

Scott Olson/Getty Images(CHICAGO) -- Much like the deals on its website, Groupon’s stock is selling at a discount. The shares have plunged about 30 percent in the past two days to below its offer price.

On Tuesday, the shares closed down 15 percent to $20.07, slightly above the $20 from the initial public offering on Nov. 4. Today, the stock slid to $19.04 at the open then plunged another 14 percent to $17.21 at mid-day.

Analysts say the company may have been overvalued. With its IPO price at $20 a share, the Chicago-based company was initially valued at $12.7 billion. At the end of the day on Nov. 4, the company had a market cap of $16.5 billion.

Ken Sena, director in the equity research group of Evercore Partners, had valued the shares at $8-$10 billion before the IPO, even with bullish assumptions.

A spokeswoman for Groupon said the company could not comment because it is in a 40-day “quiet period” in accordance with SEC rules following an IPO.

Analysts had warned that Groupon’s business model was rapidly being replicated by fierce competitors like fellow deals website, LivingSocial.

Some merchants have said they have lost money through deal sites like Groupon while others have used them as marketing tools to attract new customers.  Merchants have complained that the new customers from Groupon can disrupt their business and aren’t very loyal.

Groupon says it has over 50 million subscribers and has sold over 22 million Groupons in North America, as of January 2011.  The company launched in November 2008 and has never made a profit.

Copyright 2011 ABC News Radio

Monday
Nov142011

More Shoppers Going Online for Holiday Deals

Ryan McVay/Thinkstock(NEW YORK) -- What's your shopping strategy for the holidays?  A new survey finds more than ever consumers are likely to search daily deal websites for discounts.

Registrations for bargain sites like Groupon, Living Social and Gilt Groupe are going up, and users are beginning to branch out.

"Those same people who are most likely to be on those have memberships to four or five of them not just one," says Ray Florio, who studies shoppers' behavior at Accenture Consulting.  "They're actively looking in all these new forms of media for any discounts they can get."

And Florio says how consumers shop is also changing.

"Customers go into a store and they actually treat it more like a showroom than they are a place to buy something," he says.

Shoppers then go online and purchase the items they spotted in stores.

Copyright 2011 ABC News Radio

Friday
Oct212011

Groupon Files for Discounted IPO

Scott Olson/Getty Images(CHICAGO) -- Coupon site Groupon Inc. filed on Friday to sell $540 million in an initial share offer -- far less than it had earlier anticipated after a series of stumbles and questions about its business model.

The largest online coupon site would have been valued at $11.4 billion, down from the $25 billion the Chicago-based company had discussed with its bankers earlier this year, before the markets swooned because of the European debt crisis.

In a regulatory filing, Groupon said it will offer 30 million Class A shares at $16 to $18 each.  In June, a filing showed it was planning to raise $750 million.

Investors might not be so keen to buy the shares, however.  Although Groupon had sales of $430 million in the third quarter, those sales grew at 9.6 percent -- a third of the rate of the previous quarter.  Its losses fell to $10.6 million from a loss of $101.2 million in the prior quarter.

Copyright 2011 ABC News Radio







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