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Would a Groupon CEO Exit Help the Stock?

Wednesday, 28 Nov 2012 | 3:36 PM ET
Groupon CEO, Andrew Mason
Stephen Yang | Bloomberg | Getty Images
Groupon CEO, Andrew Mason

Rumors that Groupon Chief Executive Officer Andrew Mason may be replaced pushed the company's shares higher on Wednesday, but one analyst thinks it remains to be seen whether the shake-up would be a good thing for the struggling daily deals site.

"It's to be determined," said Aaron Kessler, a senior analyst at Raymond James. "Clearly, Groupon has had growing pains as of late the last couple quarters."

"It's to be determined," said Aaron Kessler, a senior analyst at Raymond James. "Clearly, Groupon has had growing pains as of late the last couple quarters."

On Wednesday, Mason responded to reports that the company's board will discuss his performance during a meeting on Thursday and said it would be "weird" if they did not. He added that he thought the board was comfortable with his strategy.

Groupon was launched merely four years ago and is at a stage at which most companies are still privately held, Kessler told CNBC's "Squawk on the Street."

"Groupon's had to work through these issues as a public company, and arguably they were too aggressive monetizing the platform too early, and now they are starting to see some pain from that," he added.

Is Groupon's CEO Getting the Boot?
Aaron Kessler, Raymond James analyst, weighs in on possible management changes at Groupon.

Often after stocks have fallen, management changes do produce short-term bumps, but the increases later trail off, Kessler said.

"So that often happens, but, longer term, fundamentals obviously determine the stock price," he added.

Groupon's share price has slid about 80 percent amid investor concerns about the high churn rate of merchants and cooling consumer appetite for the deals.

"That's been one of our concerns," he said. "We've done survey work, and it's shown about 50 percent of merchants said they would not do another Groupon or a daily deal. So I think the way the current deal terms are structured doesn't generate a very strong ROI (return on investment) for merchants today."

—By CNBC.com's Katie Little; Follow Her on Twitter @katie_little

Additional News: Groupon CEO Andrew Mason Speaks Out

Additional Views: Daily Deal — Groupon?

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Disclosures:

Aaron Kessler does not own shares of Groupon.

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