GroupOn's Case of the Pre-Wedding Jitters

It was only a matter of time before someone blinked in the frenzied world that is social media.

本月初，快速增长的数字优惠券公司GroupOn突然取消了计划IPO前的路演。GroupOn销售从牙齿美白到spa旅行等各种折扣服务，预计将以200亿美元的估值上市。

The initial cancellation appears to have been caused by a mix of public attacks on the company, questions from the SEC on their accounting (which resulted in the amended S-1 to restate the financials), along with the current market conditions, acoording to Trent Tillman of Syndicate Trader, which specializes in IPO and secondary offerings research. It could also be from the pre-wedding jitters.

But GroupOn now says it won’t be left at the altar: It will begin the roadshows as soon as it can, then plan an IPO for as early as October. Just expect a more chastened company, one with less swagger.

GroupOn is far more troubled than its backers concede. After years of spectacular gross revenue growth, GroupOn’s North American business is flattening out. It isn’t making much headway in foreign markets. For a company that touts explosive growth, flattening out here and abroad is not a commendable event. And competitors – from Amazon to Facebook and Google – may be closing in. Most important, insiders already have cashed out. Everything else is up for grabs.

For all the accolades from the tech literati, the GroupOn business model is not unique. And although having a war chest – the company has raised more than $1.1 billion – has given GroupOn great visibility and a leg up on the opposition, competition is catching up.

“With increased competition and GroupOn’s move into smaller, local markets, both the quality of the deals and their value has diminished,” says Karthik Balakrishnan of Globescape Capital, an emerging markets advisory firm in Washington, D.C. “It’s worse for GroupOn overseas. In key markets such as China and India, local players are already well established and facing competition from other domestic players.”

GroupOn内部人士和啦啦队队员很快指出，该公司2011年的运营成本为26亿美元。不过，该公司2010年亏损4.56亿美元，2011年可能亏损更大。首席执行官梅森（Andrew Mason）警告未来的股东，GroupOn将继续在营销和销售上大举花钱。大约54%的运营费用用于营销，剩下的46%用于销售。

Skeptical analysts and industry specialists point out that the GroupOn subscribers per capital spend is less than $23 per year. There isn’t any sustainable repeat buying pattern. Perhaps most important, high-end merchants are wearying of GroupOn. Not only is a GroupOn transaction less profitable, it isn’t building traffic, they say. Several high-end New York restaurants that offered discounted dining through GroupOn say they were not satisfied with the response and also the fact that the promotion cannibalized their existing customer base.

The Securities and Exchange Commission, which itself has come under attack for its poor handling of the social media marketplace, is worried. In June, after Groupon filed to go public, the SEC asked it to remove an accounting metric, Adjusted Consolidated Segment Operating Income, which tended to emphasize revenue but did not fully capture expenditure. The SEC also seemed to be taken aback by GroupOn CEO Andrew Mason’s recent letter to his employees and shareholders that portrayed the company in a different light than presented in the S-1 offering statement of June and lambasted critics. In the current charged regulatory atmosphere that simply is a no-no.

但最令分析师和潜在投资者担心的是，早期投资者已从该公司取出9亿美元。“这不是一个伟大的公关举动，”SoftTech风投的天使投资人杰夫·克莱维尔（Jeff Clavier）和GroupOn的少数股东在最近的一次媒体采访中承认。就好像当初的投资者现在正在获利，并对企业的长期生存能力提出了质疑。

然后,当然,还有团购的问题s class A and class B shares. Large institutional investors have historically frowned on two categories because it usually short circuits governance. And with GroupOn being only three years old, giving inexperienced insiders disproportionately greater voting and oversight powers is simply asking for trouble.

不过，对于社交媒体界来说，GroupOn还是一家热门公司。它的股东包括Accel Partners和New Enterprise Associates，这是该行业最大的两家风险基金。在它的空间里，它仍然是800磅重的大猩猩。但在再次尝试IPO之前，它可能需要控制股东和员工的期望。

Says Syndicated Trader’s Tillman: “If the market stabilizes and it is clear that some IPOs are again having success I think they will attempt the offering again. But in this current environment, I don’t blame them for waiting.”