Andrew Mason Out as Groupon CEO; Shares Jump
Groupon CEO Andrew Mason was handed a pink slip Thursday, fired after the company reported disappointing fourth-quarter results along with a dim outlook.
"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," Mason said in an email to employees announcing his departure.
"If you're wondering why… you haven't been paying attention," he added. (Read the full text of the email below.)
Groupon shares shot up more than 10 percent following the news. What's the stock doing now? Click here for the latest after-hours quote.
The stock has fallen more than 75 percent since its November 2011 IPO. In regular trading Thursday, the stock fell 25 percent after the disappointing fourth-quarter results came out late Wednesday.
The results revealed that the company has had to slash its fees from merchants to grow its business and that its new Groupon Goods business would decline in the first quarter. Mason was so confident on the earnings call, he drew criticism of being entirely out of touch. Twenty-four hours later the guillotine fell.
(Read More: Why Groupon Earnings Were Such a Disappointment)
Groupon has not yet announced his successor but said Executive Chairman Eric Lefkofksy and Vice Chairman Ted Leonsis would serve as co-CEOs until one is found.
"This company outgrew Andrew, his vision notwithstanding. The company has different challenges now. It's in a different stage of its life and requires a different team," said Stern Agee Analyst Arvind Bhatia, who has a rare "buy" rating on the stock.
"For a company that's doing $5 billion in billings, they're not generating that much profit and I think there's an opportunity for somebody to come in and improve their margins over time," Bhatia said.
(Read More: Forget Dismal Earnings, Groupon Still a Buy: Analyst )
Here is the full text of Mason's email to Groupon employees:
People of Groupon,
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. 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. As CEO, I am accountable.
You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I'm getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we've shared over the last few months, and I've never seen you working together more effectively as a global company – it's time to give Groupon a relief valve from the public noise.
For those who are concerned about me, please don't be – I love Groupon, and I'm terribly proud of what we've created. I'm OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I'll now take some time to decompress (FYI I'm looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I'll figure out how to channel this experience into something productive.
If there's one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what's best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don't waste the opportunity!
I will miss you terribly.