— From our smallbiz reporter pal Jose Pagliery, reacting to the news that Groupon CEO Andrew Mason has been fired.
— The boilerplate disclaimer attached to Groupon’s very, very upbeat letter to shareholders about its “exceptional” year and “enormous, untapped” opportunity.
— CNNMoney reader mican12001, on Groupon’s very special accounting
Filing for its IPO put Groupon into its “quiet period,” the pre-IPO stretch in which executives are supposed to avoid comments that could be perceived as hyping their upcoming offering. Groupon’s top brass can’t respond to the torrent of criticism about the company’s giant losses, unorthodox accounting tricks, and risky business model.
So they had their spokescat do it for them. The cat’s latest blog post offers a grumpy “guide to the ‘quiet period,’” the stretch of time in which companies are “legally prohibited from saying anything to the press that may make the company look ‘good,’ ‘successful,’ or ‘not currently on fire.’”
As part of the press corps that’s poking Groupon with sharp, pointy things (seriously, their accounting is very worrisome, and have you seen their chairman’s past entrepreneurial track record?), we’re not feeling particularly sympathetic — but we’re amused by Groupon’s venting mechanism. One commenter was especially impressed by the cat’s way with wry quips: “Those LOLcats lull one into a false sense of security – they actually have excellent grammar.” -Stacy
Groupon has filed its S-1 and hopes to raise $750M in its initial public offering. Given they’re currently losing a staggering $117M per quarter, despite revenues of $644M, they’ll be burning through that cash almost as soon as it hits their account.
At the moment, it’s costing them $1.43 to…
— That’s our nomination for best footnote in the S1 paperwork Groupon just filed for its IPO.
Groupon put up a blog post this morning explaining that it is pulling its ads from the website of Donald Trump’s The Apprentice (which Groupon didn’t even know it had — they were put there through an ad network deal).
The post says this isn’t a political decision, just a business one:
Wait — what!? Guns, fine, but Groupon doesn’t run abortion deals to avoid “upsetting” people? How about not running abortion deals because what kind of deal could they possibly run? Buy three get one free? Half price on Tuesdays?
This local, daily deal online thang has really taken off. Groupon is probably going to go public at a value of about a gajillion — and LivingSocial will probably offer us shares of Groupon stock for only half a gajillion the day of Groupon’s IPO.
So it’s no surprise that one of the granddaddies (relatively speaking) of online deals, Travelzoo, is also trying to cash in on the local craze.
Travelzoo, which was founded in 1998 (kind of like the Mesozoic era in the dot-com world), as a publisher of hotel and airfare deals, announced ridiculously strong first-quarter numbers Thursday morning. Overall sales were up 30% and revenue from Europe surged 53%. So much for the PIIGS and that sovereign debt crisis hurting travel demand.
Helping to lead the charge? The company’s new-ish Local Deals segment, which offers discounts on meals, sporting events and the like in major U.S. and international cities. The stock surged more than 27.5% on the news Thursday.
Julianne Pepitone and I sat down Thursday afternoon with Travelzoo CEO Chris Loughlin for a chat. Loughlin explained that the company does not want to be the next Groupon. Travelzoo will not be offering daily deals per se. He said the company will focus more on quality over quantity.
“The amount of deals we don’t publish is quite surprising,” he said.
Still, Loughlin felt that the local market was a natural extension of what the company has been doing for more than a decade. Interestingly, he said that Travelzoo functions very much like a newsroom. The goal is to find the best deals and publish them only, not blast out every deal under the sun to its subscribers.
Loughlin even said his team has editorial meetings and is used to promoting deals with 60-character headlines. Naturally, I had to ask him what his headline for Travelzoo’s earnings story would be. His response: Travelzoo announces stellar results as local deals in Europe boom.
That’s 65 characters, but I’ll let it slide.
Travelzoo has a lot of momentum behind it, and it’s admirable that a company doing what it does has survived both the original dot-com bust (it waited until 2002 to go public) and the Great Recession.
Whether or not Travelzoo can effectively compete with the hot privately held upstarts over the long haul remains to be seen. But investors are clearly pleased. The stock’s up more than 125% this year alone and has soared nearly 500% in the past year.
Of course, that type of run-up may sound eerily like the late 1990s. And Travelzoo’s stock is no bargain at 80 times 2011 earnings estimates. If Travelzoo had missed forecasts instead of beating them Thursday, momentum traders probably would have fled the stock in a heartbeat.
But Loughlin said none of that worries him. He points out the company has no debt and continues to be wildly profitable. And he said he is focusing more on investors that want to buy and hold the stock — not speculators who may view Travelzoo as a proxy for Groupon until Groupon goes public. A company that doesn’t want to be compared to Groupon? Now that’s a great headline for a story. — Paul