Groupon's plans to go public certainly stirred a lot of excitement at first. However, that excitement appears to be waning. The first problem was its contention that “adjusted consolidated segment operating income” - which essentially turned a substantial loss under GAAP into a profit largely by ignoring many costs - was a meaningful metric to evaluate the company. The latest accounting wonder is their turning $713,000,000 of revenue into $313,000,000. It seems that Groupon counted the total value of the deal as revenue, although the company's revenue from each deal was a portion of the total deal value. So, they now have reported both erroneous profits and revenue.
How could the broker(s) handling this deal have failed to see these issues when they started negotiating with Groupon?
The problems are increasing as its COO has left after only five months.
The problems are increasing as its COO has left after only five months.
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