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| | [Actually 04/26/2012]: The May Report: 4/26/2012: You just can't make this stuff up! "Groupon Inc. GRPN -2.77% Chief Executive Andrew Mason told the company's employees Wednesday that the daily-deals site needs to grow up-right after he apologized for drinking too much beer." And I heard that in addition to ripping on Apple, he supposedly said that Groupon is a colossal joke.
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| | April 26, 2012
The May Report: 4/26/2012: You just can't make this stuff up! "Groupon Inc. GRPN -2.77% Chief Executive Andrew Mason told the company's employees Wednesday that the daily-deals site needs to grow up-right after he apologized for drinking too much beer." And I heard that in addition to ripping on Apple, he supposedly said that Groupon is a colossal joke.
Editor and publisher: Ron May, ron@themayreport.com, ronaldmay@aol.com,www.themayreport.com, 773-525-3944.
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TABLE OF CONTENTS
The Scoop section:
-- WSJ: Groupon Must Avoid Taking 'Stupid Risks,' CEO Says .
-- Judge Rules Illinois Internet Tax Law Unconstitutional
-- And Now Wall Street Is Beginning To Panic About Apple's Earnings
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The Scoop section:
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WSJ: Groupon Must Avoid Taking 'Stupid Risks,' CEO Says .
http://online.wsj.com/article/SB10001424052702304723304577366282578172486.html
Groupon Must Avoid Taking 'Stupid Risks,' CEO Says .
Comments (78)
By SHIRA OVIDE
Groupon Inc. GRPN -2.77% Chief Executive Andrew Mason told the company's employees Wednesday that the daily-deals site needs to grow up-right after he apologized for drinking too much beer.
Groupon Chief Executive Andrew Mason told the company's employees that the daily-deals site needs to grow up -- right after he apologized for drinking too much beer. Shayndi Raice reports on digits. Photo: Getty Images.
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In a wide-ranging town hall meeting with employees that lasted about an hour Wednesday, the 31-year-old CEO at times swigged from a beer bottle while he set corporate priorities for the next six months, including beefing up financial controls and hiring more finance staff. Mr. Mason also discussed how the Chicago company doesn't "have any margin for error."
"We're still this toddler in a grown man's body in many ways," Mr. Mason said during the closed-door employee meeting, which The Wall Street Journal observed via webcast. At one point during the address, Mr. Mason's voice broke and he said, "Sorry, too much beer."
TJ Proechel for The Wall Street Journal
CEO Andrew Mason, shown in January, says Groupon needs to grow up.
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Deal Journal: Analysts Stick With Groupon
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A Groupon spokesman said the meeting was part of a series of informal weekly town halls, where employees have a chance to ask questions of executives. Beer is available for everyone in the room, said the spokesman, who declined to elaborate on Mr. Mason's comments during the session.
Mr. Mason's comments come as Groupon, which went public in November, is trying to steady the ship. The Web company has been under pressure following a revision to its quarterly financial results last month, when Groupon said it underestimated the amount of customer refund requests for its coupon-like offers and disclosed a "material weakness" in its internal controls. Some investors also have questioned whether Mr. Mason is experienced and mature enough to be at the helm of a multibillion-dollar public company. The revision prompted an examination from the Securities and Exchange Commission, the Journal previously reported.
In the wake of the revision, Groupon plans to announce in coming weeks several additional senior-management hires, said a person familiar with the matter. In addition, the company is talking about bringing on board at least two new board members, said another person familiar with the situation.
Revamping Groupon's board and adding to its management bench may help restore market confidence in the company. Groupon's stock has fallen from its $20 IPO price last November to $12.27 as of Wednesday's 4 p.m. close on the Nasdaq Stock Market. Shares fell as much as 40% since the company disclosed the financial restatement on March 30th, though the stock has clawed back some of the losses.
Mr. Mason's candid town hall remarks show how Groupon's financial revision was a wake-up call for a company that started in late 2008 and sprouted quickly. Groupon, which is unprofitable, generated $1.6 billion in revenue last year and employs more than 11,000 people. The company has been viewed as one of the stars of the latest Web boom, along with Zynga Inc. ZNGA +3.73% and Facebook Inc. Facebook is set to go public as soon as next month in what is likely to be the biggest-ever U.S. Internet IPO.
The financial revision, Mr. Mason said at the meeting Wednesday, was "the latest in a string of just us making an example of how bad we are at being a public company. We have to get good at this."
In the meeting, Mr. Mason said Groupon made a strategic decision to grow quickly to race ahead of competitors in the nascent local-deals industry. Now, he said, Groupon needs to slow down and focus on fewer initiatives, including on "quality and control" and "not taking stupid risks."
Mr. Mason, who sported colorful striped socks, laid out the company's top five initiatives for the next six months, including financial controls and the hiring of more financial staff. He also told Groupon employees they will hear management "talk a lot about" compliance with Sarbanes-Oxley accounting rules.
Groupon reports quarterly earnings on May 14, and has said it expects to have addressed the material weakness in its internal controls by then. Bloomberg News earlier reported news of Groupon's board-candidate search.
Write to Shira Ovide at shira.ovide@wsj.com
A version of this article appeared April 26, 2012, on page B1 in some U.S. editions of The Wall Street Journal, with the headline: Groupon Must Avoid Taking 'Stupid Risks,' CEO Says.
Join the discussion 78 Comments, add yours More In Management »
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Judge Rules Illinois Internet Tax Law Unconstitutional
Subject: Judge Rules Illinois Internet Tax Law Unconstitutional
Date: 4/25/2012 8:54:01 P.M. Central Daylight Time
From: ed.longanecker@techamerica.org
To: ronaldmay@aol.com
Judge Rules Illinois Internet Tax Law Unconstitutional
Wednesday, 25 April 2012 By Lisa Picarille 1 Comment
Judge found in PMA's favor, declaring the law violates the Commerce Clause and Internet Tax Freedom Act.
Chicago-In Illinois Circuit Court, Judge Robert Lopez Cepero ruled that the Illinois Affiliate Nexus Tax law violates the Commerce Clause of the US Constitution, declaring the activity described in the statute does not establish nexus. In addition, the Judge agreed with the PMA's position that this statute is premature, given the Congressional moratorium related to Internet tax fairness.
"We are thrilled with the outcome of today's preceding and believe it paves the way for internet marketing affiliates to get back in business in Illinois." said Rebecca Madigan, Executive Director of the Performance Marketing Association, "We commend Judge Cepero for his timely and thoughtful decision."
"We appreciate the excellent representation and strong argument presented by our counsel, George Isaacson and Matthew Schaeffer, of Brann & Isaacson. Their depth of experience has proven an invaluable resource for the PMA and our members," added Madigan.
Ed Longanecker
Senior Vice President
TechAmerica
630-282-4332
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And Now Wall Street Is Beginning To Panic About Apple's Earnings
http://www.businessinsider.com/jim-cramer-on-apple-analysts-2012-4
And Now Wall Street Is Beginning To Panic About Apple's Earnings
The Most Impressive Things About Apple's iPhone Sales Last Quarter
Apple Demolishes Expectations, Delivers Another Monster Quarter
Jim Cramer nuked all Apple analysts on his show last night, saying, "Wall Street analysts don't exactly have a sterling track record (and they're paid fortunes, by the way) but this, this was perhaps the biggest screw-up we've seen with a high profile stock in ages."
The stock was slammed heading into earnings because of "awful and unhelpful" commentary says Cramer.
Analysts missed Apple's revenue by $2.4 billion, they underestimated iPhone sales by almost 5 million units, and whiffed on iPad sales.
Cramer's core diss of analysts: They freaked out about AT&T and Verizon, but those companies don't matter. He said, "They fret and extrapolate from all these individual negative data points from other companies, when they should be focusing on all the incredible opportunities Apple has going for it.
"I say stop listening to all of these bogus trading calls and focus on investing in Apple. That's the only way to make money in the most important stock of our time."
Cramer called out Peter Misek at Jefferies for cutting iPhone estimates at the last second, as well as Chris Whitmore at Deutsche Bank, Andy Perkins at Societe Generale, and Daniel Ernst at Hudson Square Research.
It's worth pointing out that Misek was still super bullish on Apple. If you listened to him, you'd be buying Apple's stock. As for the other guys, we're not familiar with their research, but it's possible there's a few outliers.
We read Apple research all day long, and the one thing we take away from it: Wall Street loves Apple.
Leading up to earnings, not one, but TWO analysts raised their price targets to $1,000. And the community in general was raising EPS estimates as the stock was getting slammed.
Maybe there were back channel whispers that Apple was screwed, but all the sell-side guys were screaming, "BUY THE STOCK!!!"
Did they miss on the individual numbers? Sure. But that's nit-picking. It's very hard to nail down the exact numbers. The general sentiment coming from sell-side is that Apple is a beast and you should load up the boat on it.
See Cramer's video here >
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