Does Groupon Need an Executive Shakeup?
Groupon, Inc. (NASDAQ:GRPN) co-founder and CEO Andrew Mason will be getting a scheduled performance review at the company’s next board meeting on Thursday, and AllThingsD reports that some directors feel it’s time for a change in leadership.
One of the core components of our CHEAT SHEET Investing Framework asks us to investigate whether A-Level managers are jockeying the horse. No matter how thoroughbred a horse, the jockey is critical to success.
Catalysts are critical to discovering winning stocks. Check out our newest CHEAT SHEET stock picks now.
Is Andrew Mason the Right Man for the Job?
It’s clear that Mason has had some brilliant successes in launching and running Groupon so far. Groupon launched its IPO with a $12 billion valuation after attracting (and declining) a $6-billion buyout offer from Google (NASDAQ:GOOG) and a rumored $3 billion bid from Yahoo (NASDAQ:YHOO). Mason has pioneered a number of innovations in the online deal-of-the-day space and by all accounts is a great guy who fosters a great work environment.
But “‘The question is not whether Andrew is a good guy, but whether Groupon needs an Eric Schmidt,’” AllThingsD reports, quoting a person close to the situation. Schmidt is the CEO of Google who was brought in to work closely with the founders, Sergey Brin and Larry Page, and provide a type of experienced, executive-level leadership they could not.
Shares of Groupon have come down over 80 percent since its IPO in the face of high marketing costs and declining interest in the daily-deals space. Both investors and the company’s management recognize that innovation and a stronger core business model are needed to spur a substantial turnaround — and everybody knows that the CEO is the hero of a good turnaround story (all eyes on Yahoo?).
How Will This Affect Groupon’s Stock?
Despite its stock price evaporating into thin air, Groupon has attracted some big-ticket attention recently. Tiger Global Management, the massively successful hedge fund run by Chase Coleman, recently disclosed a 9.9-percent stake in the company. Morgan Stanley (NYSE:MS), which also helped underwrite the IPO, holds a 2.2 percent stake in the company.
The right leadership could easily be a good reason for Groupon bulls to charge. Keep an eye out for news coming out of the board meeting tomorrow, but any leadership change will likely be gradual.
Don’t Miss: Can Facebook Take a Hint?