Groupon ‘to reinvent’ local shopping: CEO letter to shareholders
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Groupon Inc.is more than “a glorified mailing list,” wrote Chief Executive Andrew D. Mason in a glowing, ambitious letter to shareholders on Monday. What’s currently known as a daily deals company is going to “profoundly change the way we shop locally,” he wrote.
The company’s stock basked in Mason’s optimism, rising nearly 5%, or 48 cents, to $10.45 in early afternoon trading in New York.
Since debuting in November at $20 a share, Groupon’s share price has been on a slump due to investor doubts, earnings restatements and leadership instability.
The Chicago company had to re-report its fourth quarter and full-year earnings after low-balling how much it needed to put aside for customer refunds. In late April, it shook up its board of directors, replacing Starbucks Corp. Chief Executive Howard Schultz and venture capitalist Kevin Efrusy.
“Though the six months since our IPO have been rocky to say the least, the fundamentals of our business have continued to improve,” Mason wrote.
The bumpy road is “an unfortunate side effect of our unprecedented growth,” Mason wrote. Since launching 3 1/2 years ago, the company has taken on 11,000 employees in 48 countries, he wrote.
In 2011 alone – an “exceptional year” – more than 33 million customers bought more than 170 million Groupons from more than 250,000 merchants, according to Mason. Revenue spiked 415% to $1.6 billion and the company’s earnings-per-share loss shrunk to 12 cents per share in the fourth quarter from 48 cents in the first, he wrote.
Through the year, Mason said Groupon launched a slew of services and made 11 acquisitions. The company expanded its personalization algorithms and boosted its mobile business to claim nearly 30% of North American transactions in April.
Mobile customers spend more than 50% above what customers without smartphones and other devices do, Mason wrote.
Groupon, he wrote, is “setting out to reinvent the multi-trillion-dollar local commerce ecosystem.”
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