Groupon (NASDAQ:GRPN) is expected to announce its earnings next week, but it has released an annual stockholders’ letter by its CEO, Andrew Mason, in what seems to be a bid to convince the world that Groupon is still a great business despite all the recent accounting errors, controversies, SEC probes and shareholder lawsuits which have plagued Groupon in the last couple of months. [1]
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In the letter, Andrew Mason highlights some significant achievements by Groupon in 2011:
- By year-end, we sold more than 170 million Groupons to more than 33 million active customers on behalf of more than 250,000 merchants in 48 countries around the world.
- Launched 11 new products and services, including Groupon Goods, Getaways, Rewards, Now!, and Scheduler.
- Completed 11 acquisitions, which both expanded our geographic footprint and accelerated our product road map.
While Groupon has seen significant growth in revenues and mounting losses in 2011, we expect it to eventually rein in its operating expenses and turn a steady profit.
Mason also outlined his long term vision for Groupon. He is aiming to make Groupon “the operating system for local commerce”, instead of just a daily deals service for local businesses. He wants to reinvent the local commerce ecosystem, and is building an integrated suite of tools and services which serve all the needs of local businesses. It has already rolled out services like Groupon Scheduler and Groupon Rewards, which seems like a right step in that direction.
We currently have a $14 Trefis price estimate for Groupon, which stands nearly 30% above its market price, which is hovering near its all time low. Daily deals account for a major portion of its overall value. It competes primarily with LivingSocial backed by Amazon (NASDAQ:AMZN), Google (NASDAQ:GOOG) Offers, Yelp (NYSE:YELP) and countless clones, but is looking to expand its offerings in other categories to diversify its revenue streams.
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Notes:- Groupon Stockholders’ Letter, Groupon [↩]
