Is Groupon IPO Trouble in the Making?
The Street is closely watching the Groupon IPO which is expected to price on Thursday and begin trading on Friday.
Ahead of the offering, the company landed in the spotlight after theNew York Times raised some questions about Groupon’s financials and how the numbers are reported.
The author of that story, Anthony Catanach, an associate professor at the Villanova School Of Business wrote:
Over the last few months, Groupon has raised serious concerns about the reliability of its numbers in a series of well-publicized financial reporting miscues.
First, in August the Securities and Exchange Commission required the company to amend its registration statement for its use of the controversial “Acsoi” metric, which understated operating losses by $120 million by excluding noncash expenses and online marketing expenses. In September, the S.E.C. forced yet another registration statement amendment, this time to correct the company’s method of reporting revenue.
In this case, Groupon was caught inflating revenue by $400 million in 2010. Clearly, the proof is not in Groupon’s numbers, and the road show does little to address concerns about the quality of the company’s financial reporting disclosures.
Groupon’s latest prospectus, filed on Tuesday, shows little change in the financial picture, with negative shareholder equity and negative working capital.
The Fast Money traders were so intrigued by the commentary, they asked Anthony Catanach to join the panel on Wednesday. If you plan to trade Groupon stock don’t make a move until you check out this interview. Watch the video now!
Got something to to say? Send us an e-mail at email@example.com and your comment might be posted on the Rapid Recap. If you'd prefer to make a comment, but not have it published on our Web site, send those e-mails to firstname.lastname@example.org.
Trader disclosure: On Nov 2, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Seymour is long BAC; Seymour is long INTC; Adami Owns AGU; Adami Owns C; Adami Owns GS; Adami Owns INTC; Adami Owns MSFT; Adami Owns NUE; Adami Owns BTU; Terranova is long IBM; Terranova is long AAPL; Terranova is long CF; Terranova is long AKAM; Terranova is long CNQ; Terranova is long AXP; Terranova is long MUB; Finerman owns AAPL; Finerman owns BAC; Finerman owns MSFT; Finerman owns GOOG; Finerman’s firm owns AAPL short calls; Finerman’s firm owns JPM; Finerman’s firm owns YHOO short calls; Finerman’s firm owns IBM short calls; Finerman’s firm owns MSFT; J. Najarian is long DB; J. Najarian is long CBOE; J. Najarian is long CME; J. Najarian is long CIGX; J. Najarian is long MDR; J. Najarian is long MSFT; J. Najarian is long AKAM call spreads; Stutland is short AAPL puts; Stutland is long MSFT corporate bonds; Stutland is short goog put spread; Stutland is short gld puts and long call spread; Stutland is short TLT puts; Stutland is long stock and short calls INTC; Stutland is long corporate Banking sector bonds
For Brian Kelly
Shelter Harbor Capital is long Gld
Shelter Harbor Capital is long SPY
Shelter Harbor Capital is long VLO
Shelter Harbor Capital is long NLY
For Brian Stutland
Stutland Equities is a market maker holding hedged positions in VIX and VXX underlying and options.
Stutland Equities holds positions hedged in SPX and SPY
For Bill Schmitz
Deutsche Bank (and/or affiliates) owns 1% or more of any class of common equity securities of AVP.
Deutsche Bank and/or its affiliate(s) has received non-investment banking related compensation from AVP within the past year.
AVON has been a client of Deutsche Bank Securities Inc. within the past year, during which time it received non-investment banking securities-related services.
For Karen Short
I, Karen Short, hereby certify that the views expressed in this report accurately reflect my personal views about the subject securities or issuers. I also certify that no part of my compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Analysts who prepared this report are compensated based upon (among other factors) the overall profitability of BMO Capital Markets and their affiliates, which includes the overall profitability of investment banking services. Compensation for research is based on effectiveness in generating new ideas and in communication of ideas to clients, performance of recommendations, accuracy of earnings estimates, and service to clients.
BMO Capital Markets or an affiliate received compensation for products or services other than investment banking services within the past 12 months.
This issuer is a client (or was a client) of BMO Nesbitt Burns Inc., BMO Capital Markets Corp., BMO CM Ltd. or an affiliate within the past 12 months: Non-Securities Related Services. BMO Capital Markets makes a market in this security.
For Irwin Simon
For Anthony catanach
For Stuart Hughes
CNBC.com with wires.