Liz Gannes

Recent Posts by Liz Gannes

Holiday Reading: The SEC Dissects Groupon’s Original Prospectus

A point-by-point takedown of Groupon’s original prospectus, by the sticklers at the SEC, became public this week.

In a letter dated June 29, the SEC asked Groupon to clarify its accounting and informal remarks in its S-1 filing from June 2. The filing was amended multiple times before Groupon went public in November.

Back in June, the SEC found fault with Groupon extracting marketing costs from its income, saying it was “potentially misleading.”

The regulators also asked for a lot of schoolmarm-y tweaks. For instance, the SEC quotes Groupon’s statement, “Our customers and merchants are all we care about,” and asks the company to “Please balance the statements regarding the premise that your customers and merchants are all you care about with a discussion of your fiduciary duty to shareholders.”

Also made public this week were further SEC memos from this summer and fall that haggle over specific points.

Additionally, there are a couple of Groupon memos to the SEC regarding a crucial rally-the-troops internal email that was published here on AllThingsD.

Groupon argued with the SEC that Mason’s leaked email should not have been viewed as an offer to sell Groupon stock to investors, but rather “inadvertent dissemination to the public of the internal communication.” The company agreed to add the letter to its prospectus.

Here’s the first SEC letter from June, which gets into the meat of the regulators’ critique:


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I think the NSA has a job to do and we need the NSA. But as (physicist) Robert Oppenheimer said, “When you see something that is technically sweet, you go ahead and do it and argue about what to do about it only after you’ve had your technical success. That is the way it was with the atomic bomb.”

— Phil Zimmerman, PGP inventor and Silent Circle co-founder, in an interview with Om Malik