Skip to main content

Groupon updates IPO paperwork and admits it is not profitable

Groupon CustomersThe discussion about a tech bubble has been growing louder and louder as companies like Facebook and Twitter have received massive valuations. Groupon was set to try to capitalize on the frenzy but recent adjustments to their SEC paperwork may derail those efforts.

When the company first filed to go public in June it showed an operating income of $60.6 million for 2010 and $81.6 million for the first quarter of 2011. But upon reviews of Groupon’s accounting questions began to arise around its “adjusted consolidated segment operating income” (ACSOI), a metric that isn’t considered standard in IPO filings. ACSOI reports a company’s operating income excluding several major expenses, including marketing and acquisition-related costs.

“We exclude those costs because, unlike our other marketing expenses, they are an up-front investment to acquire new subscribers that we expect to end when this period of rapid expansion in our subscriber base concludes,” Andrew Mason, Groupon’s CEO wrote in the report.

When Groupon revised the data and resubmitted, they showed a $420 million operating loss for 2010 and a $117.1 million loss in the first quarter. 

That’s a pretty startlingly difference.

Since the report was revised and could now include data through the second quarter, it stated: “We had net income of $21,000 for the second quarter of 2009 as compared to a net loss of $102.7 million for the second quarter of 2011.” That’s two consecutive quarters of losses over $100 million.

Revenue figures for Groupon can also be murky because of the nature of its business model. When a customer pays, this is gross revenue, but an inherent cost is built into that revenue because Groupon must turn around and pay the merchant for their product.

Topics
Caleb Garling
Former Digital Trends Contributor
X CEO reveals video calls are coming to the app formerly known as Twitter
The new X sign replacing the Twitter logo on the company's headquarters in San Francisco.

X, formerly Twitter, is to get video calling as part of ongoing efforts to turn the platform into a so-called “everything app” offering a broad range of services.

X CEO Linda Yaccarino announced the news during an interview with CNBC on Thursday.

Read more
How to download Instagram photos (5 easy ways)
Instagram app running on the Samsung Galaxy Z Flip 5.

Instagram is amazing, and many of us use it as a record of our lives — uploading the best bits of our trips, adventures, and notable moments. But sometimes you can lose the original files of those moments, leaving the Instagram copy as the only available one . While you may be happy to leave it up there, it's a lot more convenient to have another version of it downloaded onto your phone or computer. While downloading directly from Instagram can be tricky, there are ways around it. Here are a few easy ways to download Instagram photos.

Read more
X seems to have deleted years of old Twitter images
The new X sign replacing the Twitter logo on the company's headquarters in San Francisco.

The social media platform formerly known as Twitter and recently rebranded as X appears to be having trouble showing images posted on the site between 2011 and 2014.

The issue came to widespread attention on Saturday when X user Tom Coates noted how the famous selfie posted by Ellen DeGeneres at the Oscars in 2014, which quickly broke the “most retweets” record, was no longer displaying. Later reports suggested the image had been restored, though, at the time of writing, we’re not seeing it.

Read more