Until today’s earnings announcement, things were looking good for Andrew Mason, the founder and CEO of Groupon.The daily-deal company’s stock had more than doubled from where it had bottomed out in November. It crossed $5—an important point for investor psychology and institutional support, since some mutual funds can’t buy stocks trading below that point—early in the year.
In after-hours trading, it gave most of those gains up.
There’s been a lot of speculation about whether Andrew Mason will keep his job. The last word from the company was that the board and management were heads-down working on turning the company around.
After this earnings disappointment and a dismal, low-growth outlook for the first quarter, it’s not clear why Mason is the right person to do that.
The only thing that’s going well for Groupon is its e-commerce business, Groupon Goods. And Groupon has an executive, COO Kal Raman, who knows e-commerce well. He worked at Amazon and ran Drugstore.com. (Groupon has also been quietly staffing up with a host of Amazon veterans.)
So it’s pretty obvious what Groupon needs to do: Milk the declining daily-deals business for cash flow by continuing to cut marketing costs; invest in Groupon Goods; and fix or dump its European business.
What you’re left with is an interesting e-commerce business with a well-known brand, one that can potentially sidestep Amazon by focusing on surprising consumers with great one-off deals and unusual inventory. (By the time Amazon gets around to price-matching Groupon offerings, Groupon will have moved on to selling other stuff.)
The question is whether it makes sense for Groupon’s quirky founder to run that business, or an experienced e-commerce executive.
By the stock price, it seems like the market is voting against Mason.