Groupon Inc. ousted Andrew Mason as chief executive officer a day after reporting results that missed analysts’ projections, underscoring his inability to cope with diminished demand for online daily coupons.
Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis will oversee the company as it searches for a successor. The decision to replace Mason was made at a board meeting today, according to a person with knowledge of the matter who asked not to be identified because the meeting was private. The directors plan to hire an outside firm to conduct the search for a permanent CEO, and don’t plan to consider existing board members, this person said.
“I was fired today,” Mason wrote in a public letter that reflected his characteristic sense of humor. “If you’re wondering why, you haven’t been paying attention.”
Mason’s ouster caps a tumultuous tenure marked by financial restatements in the run-up to the company’s initial public offering, followed by disappointing results and a plunging share price. The CEO faltered in efforts to lessen Groupon’s dependence on daily discounts on products and services, using a shift into the broader e-commerce market. The company forecast first-quarter sales that missed analyst’s average predictions.
“You saw the writing on the wall last quarter,” said Edward Woo, an analyst at Ascendiant Capital Markets. “I thought they would give him more time, but obviously yesterday’s news was pretty bad.”
Shares surged as much as 13 percent in late trading after the change was announced.
Under Mason, Groupon had been sharpening a focus on retail to boost growth as demand for online discounts faded and pressure from investors and his board climbed. Groupon directors discussed ousting him in November, people with knowledge of the matter said at the time.
Mason’s fortunes began to turn even before Groupon went public, as the Chicago-based company backtracked on a controversial approach to accounting outlined in its S1 IPO filing. His plight worsened with the disclosure of material weaknesses in record-keeping and as the share price plunged.
“From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves,” Mason wrote in the letter. “As CEO, I am accountable.”
Groupon said yesterday that first-quarter revenue will be $560 million to $610 million. Analysts on average had predicted $647.7 million, according to data compiled by Bloomberg.
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