Groupon's Mason, under fire, to fire himself if needed
By Liana B. Baker | November 29, 2012 6:07 AM EST
Groupon has shed four-fifths of its value since its public trading debut as an investor favourite during last year's consumer dotcom IPO boom, and Mason himself has presided over a string of high-profile executive departures.
Wall Street has grown uneasy about the viability of its business as fever for daily deals has cooled among consumers and merchants, hurting its growth rate.
Mason, responding to reports that the board of directors will discuss his performance during a regular Thursday meeting, said it would be "weird" if they did not. But he said he believed the board was comfortable with his strategy.
"It would be more noteworthy if the board wasn't discussing whether I'm the right guy for the job," Mason said in an interview from a Business Insider conference in New York. "If I ever thought I wasn't the right guy for the job, I'd be the first person to fire myself."
"As the founder and creator of Groupon, as a large shareholder..., I care far more about the success of the business than I do about my role as CEO," he said.
In the interview broadcast from the conference, the outspoken and sometimes-zany co-founder argued his company was going through a period of volatility but believed it was on the right path. Groupon's efforts to reduce its reliance on plain vanilla deals include bumping up its "Goods" retail business, increasing the selection of "persistent" or long-running deals, and allowing users to search for such deals on demand.
Shares in Groupon spiked after the interview and were up 2.8 percent at $4.07 (2.54 pounds), still way below its $20 market debut price.
Groupon and rivals in the daily deals business, like Amazon.com-backed LivingSocial, were supposed to change the very nature of small-business advertising. Instead, they were forced to revamp their business models as evidence mounts that their strategy was flawed.
This month, Groupon reported another quarter of disappointing earnings, and its stock went as low as $2.60 on November 12.
Europe has been a particular problem for Groupon, partly because the sovereign debt crisis has sapped demand for higher-priced deals. Groupon was also offering steeper discounts, turning off some European merchants.
International revenue, which includes Europe, grew just 3 percent to $277 million in the third quarter, while North American revenue surged 80 percent to $292 million.
Adding to its difficulties, the U.S. Securities and Exchange Commission is looking into Groupon's accounting and disclosures, areas that raised questions among some analysts during its IPO.
But Mason shrugged off speculation that the company might run into a cash crunch and go bankrupt. The company has said it had $1.2 billion in cash and equivalents with no long-term debt.
"There was a period when those stories started that I'd go my CFO ... and say: 'how would that happen, walk me through what would be required for us to actually go bankrupt'," Mason said. "And it's like an end of apocalyptic days scenario. The business would have to go into severe negative growth for something like this. The scenario is so absurd there's no evidence for it."
(Reporting By Liana Baker; Editing by David Gregorio and Tim Dobbyn)
Join the Conversation
- Tourre on stand says email in SEC case 'not accurate'
- Syrian authorities blocking access to needy in Homs - Red Cross
- Faith in European Union at low ebb, EU poll says
- Former UBS banker gets 18 months, $1 million fine, for muni bid-rigging scheme
- U.S. judge halts challenges to Detroit's bankruptcy bid
- Russia Is Ready for Shooting War, Will Likely Win Looming Nuclear Showdown with U.S. – Report
- Black Friday And Cyber Monday Sale 2014: AT&T's Cricket Wireless Offers Discounts On Lumia 1320, Galaxy S5, S4 And HTC Desire 510
- ISIS Kidnaps Iraqi Defence Minister’s Family, Executes Female Parliament Candidates
- '$2,000 For Sex'—Pleads Unlucky-in-Love Guy On OKCupid
- Google Joins Forces with GoPro Inc with New Google Maps Focusing on Destination
- Target Early Black Friday 2014 Sale Ad Released For Nov. 26, 2014 Includes Deals On Toys, HDTVs And Video Games Such As ‘FIFA 15’ And ‘NHL 15’ For Xbox 360 [WATCH VIDEO]
- Lumia Update Will Come Soon Confirms Microsoft