Groupon Sinks 13% on 4Q Restatement

By Matt Egan Features FOXBusiness


Shares of Groupon (GRPN) retreated 13% Monday morning as Wall Street expresses displeasure at the daily deals company’s latest accounting headache.

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Late Friday, Chicago-based Groupon, which went public last year, said it needs to slash its fourth-quarter revenue outlook and deepen its net loss view due to higher-than-expected refunds.

Groupon, which has publicly clashed with the Securities and Exchange Commission over its financial metrics in the past, also disclosed it has a “material weakness” in internal controls over its financial statements.

In the wake of those announcements, a slew of shareholder-rights lawyers announced investigations into Groupon and some analysts released negative research notes.

Bank of America Merrill Lynch (BAC) downgraded Groupon to “neutral” from “buy,” while Stifel Nicolaus cut the stock to “sell” from “hold.” Evercore Partners trimmed its price target to $20 from $28, maintaining an “equal weight” rating.

Groupon had to lower its quarterly revenue by $14.3 million and its operating income by $30 million.

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Shares of Groupon dropped 13% to $15.99 Monday morning, putting them on pace to add to their 2012 slide of 11%.

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