Andrew Mason, founder and chief executive of Groupon, has been ousted after the online voucher firm posted another quarterly loss, prompting a 24% slide in its share price on Thursday.
Groupon’s shares have lost 77% of their value since the firm was floated on the Nasdaq in November 2011, as investors fear its business model offering bulk discount deals may be unsustainable.
Andrew Mason, who set the firm up in 2008, told staff: “I will miss you terribly.”
In a note to employees, Andrew Mason said: “After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention.”
Groupon’s board said that executive chairman Eric Lefkofsky and vice chairman Ted Leonsis would step in as temporary joint chief executives until a replacement for Andrew Mason could be found.
Speculation has been rife since last year that Andrew Mason’s days were numbered, prompting him to state in November that: “If I ever thought I wasn’t the right guy for the job, I’d be the first person to fire myself.”
However, the timing of the move did catch some investors by surprise, who thought the boss would be given until the summer to try to turn things around.
“Groupon is a very large, very complex, multi-faceted global business,” said Tom White, of Macquarie Research.
“They are either going to have to find somebody who is a proven executer in handling complex businesses, or maybe this is a signal they are going to simplify.”
Andrew Mason, founder and chief executive of Groupon, has been ousted after the online voucher firm posted another quarterly loss
Sameet Sinha, of B Riley & Co, said: “Andrew Mason was a young guy. He had never run a company before, and all of a sudden he was running a company which was in almost 50 countries worldwide. It was definitely something that he couldn’t manage. So they had to make that change.”
Late on Thursday, the company revealed that it had made a bigger-than-expected loss for the last three months, and said that revenues during the current quarter would also undershoot expectations.
Many investors have been concerned for some time that Groupon’s customers are tiring of the deals it offers, and that it is facing more competition from other start-ups and from big firms such as Amazon and Google, who have been copying its strategy.
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Groupon has swung into profit but weaker-than-expected revenue figures sent shares in the voucher firm sharply lower in after-hours trading.
Net income for the three months to the end of June was $28.4 million, against a loss of $107.4 million a year ago.
Revenue rose 45% to $568.3 million, and would have been higher but for a $32.4 million hit on exchange rates, the company said.
But investors had expected a higher figure and shares in the firm fell more than 10% in after-hours trading.
Groupon has swung into profit but weaker-than-expected revenue figures sent shares in the voucher firm sharply lower in after-hours trading
“Revenue was at the lower end of where they guided,” said Herman Leung, an analyst at Susquehanna Financial Group.
Groupon said it now had 38 million active customers, an increase of 65% on a year earlier.
It performed particularly well in North America, where revenues surged 66%.
“We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure,” said Andrew Mason, Groupon’s chief executive.
The company said total revenues would continue to grow, forecasting between $580 million and $620 million for the current quarter.
Groupon made its stock market debut in November at $20 per share and peaked above $31 a share.
They closed on Monday at $7.55, but fell below $6.50 in after-hours trading.
Nokia has decided to add Groupon offers to maps on its Lumia smartphones.
By clicking on a green “G” icon, US users can now buy Groupon’s discounted deal-of-the-day vouchers from their handsets and then locate the retailers participating in the offers by using Nokia’s navigation system.
An analyst said the deal could be an advantage for Groupon, which had so far not been “local enough”.
Nokia said it was interested in different ways of monetizing its maps.
The new location platform will be integrated into the phone’s Windows Phone 8 operating system.
Nokia has decided to add Groupon offers to maps on its Lumia smartphones
“It is to our benefit to ensure that many different companies use this, and there will be companies taking advantage of the platform who may compete with other elements of Nokia,” said the Finnish company’s head, Stephen Elop.
“But that has to be okay. It has to be, you have to think that way. The competition… is not with other device manufacturers, it’s with Google.”
Nokia had been trying to make its maps available to a wide range of people, said Martin Garner, an analyst from CCS Insight.
He added there were already some major web players using them, including social network Foursquare and Yandex, Russia’s main search engine.
“It’s not a surprise that Groupon is doing this, it’s a logical extension,” he said.
“There’s a whole area of web use that could be made better if it used local information and maps, and one of the big weaknesses of Groupon’s strategy has been that it hasn’t been local enough.
“And by working with Nokia they can do this better. Lots of people are very interested in the local commerce, and this could be a way of making this work.”
