Groupon stock dives with new case of 'spotty accounting'
Groupon stock slips as shareholder lawyers start to see the company as a juicy target. Will a lawsuit further depress the Groupon stock?
Groupon stock slips as shareholder lawyers start to see the company as a juicy target. Will a lawsuit further depress the Groupon stock?
Groupon stock has been falling since it revealed on Friday that it was revising its first quarter earnings to reflect a larger than expected loss. With its spotty accounting history, Groupon is now a juicy target for shareholder lawyers, who believe the company may be liable for the losses investors have suffered since Friday. The stock is currently down about 12 percent.
When it filed to go public with the Securities and Exchange Comission, Groupon鈥檚 accounting raised some red flags and the company eventually revised its financials with the SEC before its IPO. Considering all the scrutiny, the news on Friday that it鈥檚 auditor, Earnst and Young, said the newfound errors revealed 聽鈥漨aterial weakness in internal controls鈥� piqued the聽curiosity聽of lawyers.
鈥淲hen you do a registration statement there鈥檚 extensive due diligence so you would think this was uncovered at the time,鈥� Jacob Zamansky of the New York-based law firm Zamansky & Associates, which represents investors, told Deal Journal.
Groupon blamed its new losses on higher than expected returns from the holiday season. But our own Rocky Agrawal argues that the company should have seen this coming a mile away.
Unfortunately for shareholders, their stock, unlike Groupon鈥檚 deals, cannot be so easily refunded.