CEO Andrew Mason Out at Groupon After Stock Plummets
[UPDATE: Andrew Mason has been ousted as CEO of Groupon, the company announced just after the markets closed on Thursday. Mason will be replaced by the newly created Office of the Chief Executive, which will be headed by Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis while they search for a permanent replacement.
Mason tweeted a statement confirming the firing.
"From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that's hovering around one quarter of our listing price, the events of the last year and a half speak for themselves," he wrote. "As CEO, I am accountable."
In typical Mason fashion, the statement veers into whimsy, making reference to the Nintendo game "Battletoads" and suggesting that he's planning to go to fat camp to lose his "Groupon 40."
Groupon stock is presently surging on the news in after-hours trading; as of a little after 4:30 p.m. EST, it was up 13%.
Our original story on Groupon's poor showing -- and Mason's shaky future -- is below.]
A lot of folks are joking that Groupon's (GRPN) stock now resembles one of its daily deals after losing more than 25% of its value in after-hours trading Wednesday. But founder and CEO Andrew Mason probably isn't laughing: The latest "discount" on Groupon stock could cost him his job.
The precipitous drop -- shares are once again trading below $5 -- came after the daily deal giant's fourth-quarter earnings came in well below projections. The company reported an operating loss of $12.9 million for the quarter, and investors expecting earnings per share of around 3 cents were instead greeted with a loss of 12 cents per share. It also projected revenues between $560 million and $610 million for the first quarter of 2013, below analysts' projections of $650 million.
Meanwhile, Groupon CFO Jason Child told Reuters that the company's "take rate" -- the percentage of money it keeps from each daily deal -- is on the decline. As competition in the daily deal industry has increased, Groupon is apparently having a harder time negotiating favorable terms with merchants.
The resulting sell-off has also prompted a fresh round of rumors that Mason could soon be out of a job after the company and its young CEO spent much of 2012 in a downward spiral. It caught flak for questionable accounting practices that didn't include marketing costs, and in the spring it had to issue a restatement of earnings after admitting that it didn't set aside enough money for refunds. In November, rumors swirled that Groupon's board was discussing replacing Mason with a more experienced executive, and we listed him as one of our endangered CEOs for 2013.
Those rumors are likely to get fresh legs now, and outlets including Quartz and Business Insider agree that his job is in serious jeopardy. The Chicago Sun-Times points to new COO Kal Raman as a possible successor.
On Tuesday, Bloomberg asked a company spokesperson if Mason's job would be affected by the fourth-quarter results. He responded, "He's here today."
Tomorrow is another matter entirely.
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.