Groupon asks investors to ignore co-founder’s reported statement
Groupon Inc. has filed an amended document for its planned initial public offering that asks investors to ignore a reported statement by company co-founder Eric Lefkofsky that the daily deals giant would be “wildly profitable.”
Other changes to the amended filing include detailed discussion of class-action lawsuits filed against Groupon and a more explicit acknowledgement of the company’s competition.
FOR THE RECORD:
In an earlier version of this article, the headline attributed a statement to Groupon’s CEO. Eric Lefkofsky, who made the statement, is a company co-founder, not chief executive.
In early June, Bloomberg quoted Lefkofsky as saying: “I’m going to start a lot of companies. These are not sham companies. These are great businesses. InnerWorkings is profitable. Echo is profitable. Groupon is going to be wildly profitable.”
The financial news service said Lefkofsky made those remarks on June 3, a day after Groupon filed for an IPO with the U.S. Securities and Exchange Commission.
According to the amended filing, Lefkofsky did not agree to the interview and had asked through representatives that his remarks not be published.
“The reported statement does not accurately or completely reflect Mr. Lefkofsky’s views and should not be considered by prospective investors in isolation or at all,” Groupon said.
Groupon said prospective investors should “rely only on statements made in this prospectus” when deciding whether to participate in the public offering.
In another change from the original document, Groupon disclosed that it and several merchant partners are defendants in more than 15 purported class-action lawsuits claiming that the company is subject to federal and state laws regulating gift cards. Certain consumer protection laws prohibit gift cards from expiring, and Groupon deals have expiration dates. On Thursday, Connecticut’s attorney general said it was looking into this issue.
“While Groupon intends to defend these actions vigorously, the outcome of these actions?may substantially harm our business,” the company said.
The revised language in the document inserted a more cautious tone than the original. For example, a letter from company co-founder and Chief Executive Andrew Mason has new language that reads, “As with any business in a 30-month-old industry, success for our investors is not guaranteed. We have yet to reach sustained profitability and we have no shortage of competition.”
The original letter read: “As with any business in a 30-month-old industry, the path to success will have twists and turns,” and did not include the line about profitability and competition.
On the subject of competition, the amended filing clearly stated who Groupon considers to be its “major domestic competitors.” The document named Google, Eversave, BuyWithMe and LivingSocial. The previous filing had spoke more generally about competition and named Facebook, Google and Microsoft as examples of “other large Internet and technology-based businesses” that have launched similar offerings to Groupon.
Affinion Group, a Connecticut marketing agency, said Thursday it is acquiring the parent company of Eversave, a daily deals site aimed at women and families. The purchase price was $30 million.
