Groupon's Andrew Mason: 'What, Me Worry?'
By Prescott Carlson in News on Aug 26, 2011 6:20PM
Despite things such as hefty losses, SEC scrutiny, and public relations stumbles, Groupon CEO Andrew Mason says everything is just fine and people should feel free to stuff their portfolios with company stock after the company's highly anticipated $750 million initial public offering.
According to AllThingsD, Mason penned a rose-colored-glasses memo to employees saying Groupon has "never been stronger," and that recent press -- which he says has "finally crossed the threshold from 'annoying' to 'hilarious' -- would lead a "rational person" to "wrongly conclude that [Groupon is] in trouble."
"Amidst all this, I hope you remember what we're doing here," Mason said in the memo. "We are making history together. I guess you don't get to build something that reshapes the local commerce ecosystem without getting a few bruises. I'm so proud of the work we're doing, and I feel extraordinarily lucky to work on what I think is the best thing that's happened to small businesses since the telephone."
Mason also addressed the company's questionable accounting methods in its original IPO, which "disappeared" some of its largest expenses:
"The reason everyone in the world seems to hate [adjusted consolidated segment operating income] is that it makes us look magically profitable by subtracting a bunch of our customer acquisition marketing costs from our expenses," Mason said. "The reason we didn't realize everyone in the world would hate ACSOI (no, it's not the same reason we didn't realize everyone in the world would hate our Superbowl ad), is that we think it actually does a pretty good job at describing our marketing expenses in a steady state -- we just didn't realize there would be so many skeptics."
As for speculation that Groupon may be heading for some serious cash flow woes, Mason compared his company to Amazon.com and Wal-Mart, saying, "Both have often had payables far in excess of their cash. Finance geeks call this a working capital deficit... We're doing the opposite of running out of money."
Of course Amazon.com and Wal-Mart have actually managed to post a few bucks here and there in profit, but why split hairs.
In his "final thoughts," Mason put a "silver lining" on all the Groupon criticism, saying, "We're almost on the other side, and the negativity leaves us well-positioned to exceed expectations with an IPO baby that, having seen the ultrasound, I can promise you is not one of those uglies."