Groupon's shares plunge 12%

GROUPON’S SHARES fell 12 per cent yesterday after the online coupon provider’s latest financial restatement.

The shares fell $2.18 to $16.20 at 10:41 a.m. in New York. Before that the stock had declined 8.1 per cent since its initial public offering in November.

Last Friday the popular daily deals website reported a “material weakness” in financial controls and said fourth-quarter sales were lower than previously stated because of higher refunds to merchants.

That cut revenue in the period – Groupon’s first as a public company – by $14.3 million to $492.2 million (€369.4 million). The announcement added to setbacks for Groupon, which has struggled to get its financial statements in order since filing for an initial public offering in June.

The company abandoned an accounting method for operating income after a review by regulators and later restated 2010 results. The moves raise questions about why Groupon’s auditor, Ernst Young, didn’t point out concerns sooner, said Herman Leung, an analyst with Susquehanna Financial Group. – (Bloomberg)