Groupon Inc (GRPN) Doesn’t Need a New CEO

Page 1 of 2

Shares of Groupon Inc (NASDAQ:GRPN) are on fire since crossing the Mason-nixed-on line.

GrouponThe stock has risen sharply for three straight trading days since booting founding CEO Andrew Mason last week. Groupon stock opened higher this morning.

The market’s response — sending the shares nearly 25% higher in three days — is telling. Mason was a young and eccentric corporate helmsman, and Wall Street feels that a more seasoned leader will steer the daily deals specialist higher. Sources are telling Bloomberg today that the board is focusing on external candidates to fill Mason’s shoes.

I hate to be the one to defend Mason when the market has decided that Groupon Inc (NASDAQ:GRPN) is worth $725 million more in three days without him, but can anyone honestly tell me what Mason did wrong?

Grace under pressure
Flash sales aren’t the moneymaker — for the deal providers, participating merchants, and buyers of the prepaid experience vouchers — that we thought they were going to be.

You don’t have to take Groupon Inc (NASDAQ:GRPN)’s word for it. We know that its nearest rival isn’t doing so hot. LivingSocial may be private, but Amazon.com, Inc. (NASDAQ:AMZN)‘s 29% stake in the niche’s silver medalist forces condensed financials to be made public.

LivingSocial’s revenue may have doubled to $536 million in 2012, but its operating loss also more than doubled to $905 million. Yes, an impairment charge was a big part of that, but the writedowns and layoffs at LivingSocial prove that it’s the daily deals specialty that stinks, and not necessarily Mason’s driving.

Oh, and just so we’re clear here, Groupon Inc (NASDAQ:GRPN) generated more revenue in its latest quarter than LivingSocial did all year. Groupon also posting an operating profit for all of 2012.

Free Mason
I’ll go even further. I won’t just defend Mason, I’ll go on the offensive.

You have to applaud Mason’s vision. He expanded the Groupon Inc (NASDAQ:GRPN) model, following Overstock.com, Inc. (NASDAQ:OSTK) into reselling surplus, clearance, and closeout merchandise that manufacturers need to clear out.

The move pads revenue and dilutes margins, but it also frees the company from being entirely at the mercy of restaurants, spas, and stores willing to sell a dollar bill for a quarter.

Mason also moved to make the most of the company’s connections with more than 250,000 local merchants. Last year it began to take advantage of its line to small businesses by offering credit card processing and other enterprise services.

What more could you ask out of Mason? It will be very hard for the next CEO to try to do things differently and succeed.

The $6 billion man
An argument against Mason that comes up often is that Groupon balked at Google Inc (NASDAQ:GOOG)‘s reportedly $5.75 billion offer.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

4 BuzzWorthy Cannabis Stocks And Some Smoking Derivative Plays

The 10 Healthiest Fast Food Chains in America to Dine At

The 5 Most Expensive Cat Food Brands You Can Spoil Your Kitty With

The 6 Best eCommerce Platforms for Small Businesses

The 10 Worst Mistakes an Entrepreneur Can Make

The 5 Most OP Characters in League of Legends to Carry Games and Crush Foes With

The 5 Best Foods to Eat Before Running that Will Help You Pound the Pavement

10 Glaring Plot Holes in The Walking Dead that a Zombie-Filled Bus Could Drive Through

The 5 Biggest Celebrity Stoners Who Love Their Reefer

The 10 Most Overrated Movies Of All Time by Out-of-Touch Critics

Top 6 Least Expensive Cruise Destinations For 2015 that Will Take You to Paradise

10 States with Lowest Substance Abuse Rates in America

The 14 Most Watched TV Finales Ever

The 10 Best Selling Role Playing Games of All Time for PC

10 Most Influential Papers In Economics

Top 8 Biggest Charities in the US

10 Worst Celebrity Career Moves Ever

Top 10 Best Paid Tennis Stars in the World

10 Cities with High Demand for Nurses

6 of the Worst Greeting Card Messages Ever Crafted

How to Make Money in ArcheAge and Build Your Empire

10 Foods To Eat To Lower Cholesterol Levels

The 10 Most Hated Television Characters of All Time

The 30 Worst Halloween Costume Ideas Ever Brought to Horrible Life

10 Vocational Skills in Demand Today with Jobs Waiting to be Filled

10 Best Places to Visit in Central and South America

The 10 Greatest Empires in History Which Nearly Conquered the World

The 6 Cheapest Boarding Schools In America 2015

5 Clear Reasons LoL is Better than DotA, Continues to Rule MOBAs

The Only 9 Teams with a Chance to Win the Super Bowl

The 15 Most Common Phobias in America that Induce Fits of Panic

Top 6 Least Expensive Tourist Destinations in 2014

Jim Goetz, Peter Fenton, Jim Breyer: Top 6 Venture Investors for 2014

Top 15 Billionaires in 2014

5 Pitfalls To Avoid When Buying a Franchise

Top 20 Medical Schools in the US – 2014 Rankings

4 Business Strategies that Turned Jamie Oliver into the World’s Richest Chef

6 Qualities That Make You A Good Team Player

10 High Paying Seasonal Jobs in America this Holiday Season

The 10 Busiest Shipping Lanes in the World

5 Most Valuable Brands in China

The 10 States with Highest Substance Abuse Rates Crippling Their Populace

The Top 10 Things to Do Before You Die That Will Echo for Eternity

The 10 Best Selling Items on Etsy

Top 10 Things to Do in Tokyo, the Greatest City in the World

10 Mistakes on Social Media that Can Harm You and Will Probably Get You Canned

The 10 Best Cities to Find Jobs in 2014

The 10 Most Controversial Songs Of All Time to Hit (and get Banned from) the Airwaves

The 20 Biggest IPOs in US History

The 10 Best Places to Visit in Mexico that Are Beautiful and Safe

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!