Groupon's board adopts some financial discipline
After a major blunder that led to a fourth quarter net loss of $22.6 million, the daily deals company appoints new board members with strong banking and accounting backgrounds.
Embroiled in shareholder lawsuits, its stock plunging, and still headed by a CEO criticized as unpredictable, Groupon has found things a bit hectic recently. Which may explain a minor board shakeup that looks a lot like an attempt to put some grownups in control of things.
Financial veterans American Express CFO Daniel Henry and Deloitte vice chairman Robert Bass are to join Groupon's board.
"With their deep financial, accounting, and operational experience, Dan and Bob will provide invaluable expertise to the Board going forward," Groupon Chairman Eric Lefkofsky said in a statement.
Henry joined the board April 26, replacing Starbucks CEO Howard Schultz, who resigned from the board on April 24, well before the end of his term and just over a month ahead of the vesting date for 30,000 of his Groupon stock options. Bass is set to replace Kevin Efrusy from Accel Partners at the company's June 19 board meeting.
This focus on new blood from the finance world may be an indication that Groupon is looking to regain investor confidence. The daily deals company went public just six months ago, but has faced a handful of upsets that paralleled some of its pre-IPO accounting controversies -- specifically, a high-profile accounting slip-up that revealed its fourth-quarter results were worse than previously stated because of higher refunds to merchants.
That blunder increased Groupon's net loss for the fourth quarter by $22.6 million and reduced revenue for the quarter by $14.3 million to $492.2 million. It also led to two lawsuits filed by shareholders and a possible SEC investigation.Groupon went public in November at $20 a share, and its stock peaked at $31.14 in early February before beginning a downhill slide over the past couple of months. Shares closed at $10.71 today but its stock price is trading up about 2 percent in after-hours trading since the announcement of Henry and Bass joining the board.