Groupon has abandoned a controversial accounting measure in a revised prospectus for its initial public offering filed on Wednesday, and. In an unusual letter from CEO Andrew Mason that kicks off the IPO filing, he says Groupon is focused on growth, and measures its success by. Groupon is out with the fourth update to its IPO prospectus.
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Groupon adds 11 underwriters, new risk warning | Reuters
A significant increase in merchant attrition or decrease in merchant growth would have an adverse effect on our business, financial condition and results of operation. Unless otherwise indicated, information contained in this prospectus concerning our industry and the market in which we operate, including our general expectations and market position, market opportunity and market size, is based on information from various sources, on assumptions that we have made that are based on those data and other similar sources and on our knowledge of the markets for our offerings.
If our efforts to satisfy our existing subscribers are not successful, we may not be able to acquire new subscribers in sufficient numbers to continue to grow our business or we may be required to incur significantly higher marketing expenses in order to acquire new subscribers. Financial information for periods prior to has not been provided because we began operations in In addition, we may experience attrition in our merchants in the ordinary course of business resulting from several factors, including losses to competitors and merchant closures or bankruptcies.
The backbone computers of the internet have been the targets of such programs.
The historical results presented below are not necessarily indicative of financial results to be achieved in future periods. We cannot assure you that we will be able to manage the growth of our organization effectively.
If we are unable to successfully respond to changes in the market, our business could be harmed. Credit card processing fees have also increased consistent with revenue, as this cost is generally variable based on the dollar volume of transactions that are processed.
Expand with acquisitions and business development partnerships. We started Groupon in November and believe the growth of our business demonstrates the power of our solution and the size of our market opportunity: The key metrics are gross profit, adjusted consolidated segment operating income, or Adjusted CSOI, and free cash flow.
All statements other than statements of historical facts contained in this prospectus, including statements regarding our future results of operations and financial position, business strategy and plans and our objectives for future operations, are forward-looking statements. If such expenditures or initiatives become necessary to maintain a desired level of activity in our marketplace, our business and profitability could be adversely affected.
Groupon IPO Filing Includes Entire E-mail From CEO – Deal Journal – WSJ
In addition, we could incur significant costs in investigating and defending such io, even if we ultimately are not found liable. We built a dedicated merchant services team that works with our merchant partners to ensure satisfaction. In the event that it yroupon determined that Groupons are subject to the CARD Act or any similar state or foreign law or regulation, our liabilities with respect to unredeemed Groupons may be materially higher than the amounts shown in our financial statements and we may be subject to additional fines and penalties.
Free cash flow has limitations due to the fact that it does not represent the residual cash flow available for discretionary expenditures. However, a successful challenge to our position or expansion of state or foreign laws could subject us to increased compliance costs and delay our ability to offer Groupons in certain jurisdictions pending receipt of any necessary licenses or registrations.
For a description of our capital stock, see “Description of Capital Stock.
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We depend on our ability to attract and retain merchants that are prepared to offer products or services on compelling terms. Our accrued merchant payable, which primarily consists of payment obligations to our merchants, has grown, both nominally and as a percentage of revenue, as our revenue has increased, particularly the revenue from our international segment. Free cash flow also reflects changes in working capital.
We have spent and expect to continue to spend substantial amounts on prspectus centers and equipment and pio network infrastructure to handle the traffic on our websites and applications.
Many of our efforts to generate revenue from our business are new and unproven, and any failure to increase our revenue could prevent us from attaining or increasing profitability.
If the cost to acquire subscribers is greater than the revenue or gross profit we generate over time from those subscribers, our business and operating results will be harmed. The implementation of the CARD Act and similar state and foreign laws may harm our business and results of operations.
Marketing is the primary method by which we acquire subscribers, and as such, is a critical part of our growth strategy. As a result, the operating profits that Groupon cited in its first filing became operating losses.
Knowing that this will at times be a bumpy ride, we thank you for considering joining us. Adjusted CSOI is operating income of our two segments, North America and International, adjusted for online marketing expense, acquisition-related costs and stock-based compensation expense. Furthermore, if we identify any issues in complying with those requirements for example, if we or our accountants identify a material weakness or significant deficiency in our internal control over financial reportingwe could incur additional costs rectifying those issues, and the existence of those issues could adversely affect us, our reputation or investor perceptions of us.
We believe we have built a trusted and recognizable brand by delivering a compelling value proposition to consumers and merchants. The stock is still trading well above its IPO price. We expect that compliance with these public company requirements will increase our costs and make some activities more time-consuming. And our customer base grew so large that many of our merchants had an entirely new problem: We are seeking to hire a significant number of personnel inincluding certain key management personnel.
An increase in our refund rates could reduce our liquidity and profitability.
Groupon adds 11 underwriters, new risk warning
Any of these events could have an adverse effect on our business and results of operations. In most of our International markets, merchants are not paid until the customer redeems the Groupon. To effectively manage our prospecctus, we must continue to implement operational plans and strategies, improve and expand our infrastructure of people and information systems, and train and manage our employee base.