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Things Go From Bad to Worse for Groupon

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Things Go From Bad to Worse for Groupon

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CHICAGO, IL - JUNE 10: The Groupon logo is displayed in the lobby of the company's international headquarters on June 10, 2011 in Chicago, Illinois. Groupon, a local e-commerce marketplace that connects merchants and consumers by offering goods and services at a discount, announced June 2 that it had filed with the Securities and Exchange Commission for a proposed initial public offering of its Class A common stock. The company, launched in Chicago in November 2008 now markets products and services in 43 countries around the world. (Photo by Scott Olson/Getty Images)

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If Andrew Mason didn't like what he found when Googling his company, Groupon, during the quiet period of the IPO process, I'm willing to bet he isn't too pleased what he's seen this last week.

Hopefully, though, he's been busy righting Castle Groupon's affairs instead of embarking upon navel-gazing Internet searches.

Just in case you haven't heard, last week the company realized it overstated its Q4 earnings by $14.3 million and as a result is now staring down another SEC review.

So, things have gone from the "smell our farts" phase of success to the media now trying to figure out who to point fingers at. It will be interesting to watch what Groupon does and what happens to it in the weeks ahead, and already the criticism and weighing in has started (I did so on Thursday).

The New York Times blamed greedy tech companies. Pando Daily blamed Wall Street bankers. And Venturebeat says the media, individual investors, venture capitalists and Groupon itself also played a role. In other words, maybe everyone caused the downfall.

Here's Venturebeat Contributor Rocky Agrawal's take: 

"The bulk of the blame for the Groupon fiasco sits squarely on the shoulders of the company’s management. They created the model, and they executed on the plans… Just to be crystal clear: I’m not accusing Groupon executives of fraud. It’s very possible that Groupon stumbled into this situation by accident and really had no idea it was building a house of cards. Then the bad incentives took over."

The "bad incentives" being stuff like the lack of a cap on deals (which caused that infamous cupcake incident last year). No matter how you slice it, though, Groupon, objectively has a lot of problems at the moment.

Business Insider exhumes a conspiracy theory that is just that -- only a theory -- but seems to hold some amount of water. The short of it is that, allegedly, Mason is a pawn of sorts and that he's performing just as Groupon Chairman Eric Lefkosky was hoping he would. Again: This is not our theory, nor is it Business Insider's. They are merely passing it along. Make of it what you will.

It just goes to show either how rabid the media is for Groupon's downfall, or how willing people are to consider every angle as the once beloved startup enters a dark phase of its life.

Groupon's stock is at $14.18 as of market's close on Friday. Briefly on Thursday it sank to $14.09.

David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a columnist for EGM. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.

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