If not quite an obituary, The New York Times examines what went wrong with Groupon, and how Wall Street overlooked multiple warning signs in its haste to bring the company public.
“Underwriters are supposed to be gatekeepers, not just a sales and marketing agent,” say Lynn E. Turner, a former chief accountant for the S.E.C.
“Underwriters have gotten to
the point of being cheerleaders. I question whether they are really fulfilling their obligation to investors.” The offending underwriter, in Groupon’s case, was Goldman Sachs, which beat
out other investment banks to shepherd what was, as NYT writes, “supposed to be the hottest initial public offering of the year: Groupon, the fledgling online coupon company that was being
valued at around $30 billion.”
Now, however -- in the face of slowing growth, accounting and disclosure issues and serious management questions -- analysts question whether Groupon
warrants a valuation over $10 billion.
Read the whole story at The New York Times »