Wall Street hates Groupon's CEO
The deal site's shares slide 8% after the board decides to keep embattled chief exec Andrew Mason.
Groupon (GRPN) may be just fine with keeping embattled chief executive Andrew Mason, but Wall Street isn't nearly as happy about the decision.
Groupon's share price fell more than 8% Friday after the company revealed Thursday that it plans to keep Mason on board in the short term. It's been a tough week for Mason after Kara Swisher at All Things D received word Tuesday from "sources close to the situation" that several members of the deal site's board were thinking of showing him the door. That sent Groupon share prices soaring, and forced Mason to tell Business Insider in an interview on Tuesday that "it would be weird if the board wasn't discussing if I was the right guy for the job... If I ever thought I wasn't the right person for the job, I'd fire myself."None of this hints at the next step for Groupon, which has seen its share price tumble from $20 after its initial public offering last November to around $4 on Friday. Groupon executives have fled the company in droves and the daily-deals site has laid off nearly 650 workers in the last six months as businesses as small as waffle shops complain about its business model and payment practices. Both merchants and consumers have soured on daily deals recently, with $566 million in losses at Groupon competitor LivingSocial last quarter dragging down parent company Amazon's (AMZN) earnings. Just this week, LivingSocial laid off 400 workers, or nearly 9% of its staff.
Mason, meanwhile, can't be feeling terribly comfortable. According to both Swisher and the Wall Street Journal, two of the board members pushing for his ouster were Mason's co-founder and Groupon executive chairman, Eric Lefkofsky and fellow co-founder Brad Keywell. Mason's role within the company was already being minimized after Groupon hired former Amazon exec Kal Raman as chief operations officer earlier this year to take over some of Mason's day-to-day tasks.
The chief executive hasn't made much of an argument for his recent reprieve, either. Mason's fratty demeanor and public fumbles raised questions about his experience and maturity, while his public statements left critics dumbfounded. When asked by CNN two years ago why he turned down a $3 billion buyout offer from Yahoo (YHOO) and $6 billion from Google (GOOG), he responded "I want to be part of GE or something like that." He caught flak for drinking beer at a Groupon meeting before telling the company it needed to grow up. In his Tuesday interview, Mason admitted to asking Groupon's chief financial officer what it would take for his company to go bankrupt.
That Groupon hasn't taken that route under his watch is a small miracle. Its stock price fell below $3 in early November before hedge fund and private equity firm Tiger Global Management stepped in and bought a 10% stake in the company. Still, Groupon's market cap has shrunk from $13 billion to less than $2 billion and its revenue per customer is off by more than $13 in the last year.
Mason may have survived the week, but Groupon's fate remains very much in doubt. While its Groupon Goods deals on individual items have been warmly received, the market seems to have no problem scolding Groupon when it feels the deal maker is heading in the wrong direction. For now, Groupon's getting a loud, harsh talking-to.
More from Money Now
Copyright © 2014 Microsoft. All rights reserved.
Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.
[BRIEFING.COM] The stock market ended the holiday-shortened week on a mixed note as the Dow Jones Industrial Average shed 0.1%, while the S&P 500 added 0.1% with seven sectors posting gains.
Equity indices faced an uphill climb from the opening bell after disappointing quarterly results from Google (GOOG 536.10, -20.44) and IBM (IBM 190.04, -6.36) weighed on the early sentiment. Google reported earnings $0.15 below the Capital IQ consensus estimate on revenue of $15.42 ... More
More Market News
Serious issues like drought and the deterioration of the developed world spell opportunity for this industry leader.
MUST-SEE ON MSN
- Video: Easy DIY smoked meats at home
A charcuterie master shares his process for cold-smoking meat at home.
- Jetpacks about to go mainstream
- Weird things covered by home insurance
- Bing: 70 percent of adults report 'digital eye strain'