Groupon wants to make its numbers more confusing

Groupon simply cannot decide what it does and doesn’t want to say to the public, which must be making life interesting for its IR people. The company has already been through rounds of redefining terms and restating numbers. The latest news is that the company feels it has been over-sharing its daily sales numbers, as it says in a blog post:

‘As customers, we like the counter because it indicates how popular deals are. But some clever people are using the counter to make (consistently incorrect) estimates of our total company sales, which we don’t like for the same reason you probably wouldn’t like if people tried to guess your weight all day. This change is meant to continue to reflect deal popularity while making it clearly impossible to predict our sales. We’re blogging about it to be transparent about our lack of transparency.’

Then again, maybe obfuscation is the word to use. Groupon will continue to show a sales counter for each given deal, tallying the number of consumers who have bought ‒ but now it will reduce each count by a random amount between 0.5 per cent and 19.5 per cent, and then cap and round the number ‘from time to time’. Groupon will also note that the sales are ‘over’ whatever number is showing. In other words, what you see could have little relation to reality.

Could it be a smart move? In one sense, perhaps: one of the banes of managing a public company is the amount of financial data and other information of competitive interest that is open and available to anyone. And management may be concerned that regular data could lead to investor misinterpretation and resulting additional stock volatility.

But the timing is rather questionable. With all the attention Groupon has received from the SEC and potential investors because of its financial reporting, you might think the company would like to avoid making it less clear what’s going on.

[Article by Erik Sherman, Inside Investor Relations]

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