Late on Friday a big clunker of bad news -- that is the official unit of measurement for unfortunate developments -- came out for Groupon: After the market closed, it was forced to restate its Q4 earning report. Long story short? Its revenue for that quarter was actually $14.3 million less then originally reported.
Whoops.
Its stock has dropped accordingly, to $16.24. That's a 12 percent drop over the weekend, but still not the lowest the stock has ever gone. That dubious distinction belongs to Nov. 28, when it hit $15.24.
It's tempting to go back and restate all the ways Groupon's IPO has been bungled both leading up to it and in the weeks and months after it. No matter how you slice it, though, I think Groupon knows it has goofed up here -- and not in an April Fool's kind of way. This is bad. VentureBeat is declaring Groupon "poised for collapse," citing "higher refund reserves and weakness in internal controls." There's a lengthy breakdown on how Andrew Mason's company has been losing it say, but what's also interesting is that competitor LivingSocial has dropped its Instant service, which is analogous to Groupon Now!.
Reuters spoke with LivingSocial spokesperson Maire Griffin, who said, "We've always said Instant was a test… the feedback we've received from our merchant partners and members is that Takeout & Delivery better meets their needs." That's LivingSocial's food-ordering service.
What's interesting is that LivingSocial is taking its cues from its merchants on this one. And according to its findings, LivingSocial General Manager of Takeout & Delivery says consumers aren't looking to browse around on their phones to find deals at restaurants they haven't heard of before. "They are, however, looking for a faster and better way to order food from their favorite local restaurants," he explained to Reuters.
Maybe Groupon knows something LivingSocial doesn't. But it looks like Groupon's time to put its cards on the table is drawing closer and closer. Otherwise, what is it waiting for? Its stock to drop even further? There might come a point where that's no longer even possible, if things continue as they have.
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.
