Photo: Discovery Networks
Groupon is bleeding in the water, and the sharks are circling.On Friday, we learned that Groupon under reported the number of returns it had in Q4, and that the company had to revise its earnings.
Then Groupon’s auditor filed a “statement of material weakness,” basically telling the SEC it would not vouch for the company’s numbers.
Yesterday, the WSJ reported that the SEC is investigating the company.
That’s not all the company has to worry about.
Institutional investors put big money into Groupon’s IPO.
Since that day’s highs, the stock is down more that 50%. It tanked 16% yesterday alone.
If those institutions can blame somebody else for those losses and recoup any of their own investor’s money, they will.
That means if those investors catch even slight whiffs of fraud out of Groupon – and trust me, they are sniffing – the lawsuits and subpoenas will come in rapid succession.
Ever seen a shark frenzy?