It was reported today that Groupon’s IPO is delayed until September while the SEC looks into some of its “fancy” accounting metrics.
According to sources, the SEC is focusing on one metric in particular, CSOI, not to be confused with CSI, the popular television crime series. Even though both are draped in mystery, CSOI does not begin with an overplayed “Who” song.
According to Groupon, whose IPO is expected to value the company in excess of $10 billion, CSOI or “consolidated segment operating income” is a way of measuring operating income that excludes a range of expenses that Groupon considers inconsequential such as, oh, marketing fees. Dismissing those pesky little marketing fees, Groupon claims to have generated $81.6 million in the first quarter of 2011. However, taking its marketing costs into consideration, Groupon would have lost $98 million.
Today’s news comes two weeks after Groupon brought in 11 new underwriters. Eleven new underwriters? Sounds to me like the institutions just aren’t biting at a $10 billion plus valuation. Perhaps Groupon believes that retail investors, like Mikey from the old Life cereal commercials, will eat anything.
I have no doubt that Morgan Stanley, Goldman Sachs, Credit Suisse, JPMorgan, Allen & Co, Bank of America Merrill Lynch, Barclays Capital, Citigroup, Deutsche Bank Securities, William Blair & Co, Citadel Securities, Loop Capital Markets, RBC Capital Markets and the Williams Capital Group will all work together as a great underwriting team to get this deal done!
On another subject, I recently heard that someone paid $150,000 for a virtual house. ONE HUNDRED AND 50 THOUSAND REAL DOLLARS FOR A HOUSE THAT LIVES ONLY IN ONES IMAGINATION! It leads me to wonder why we are even wasting time pondering Groupon’s IPO when we should just be saving all of our money for Zynga’s…