Three months after its IPO, Groupon reported earnings that were good but not as good as many expected, and the shares tumbled. You might expect the management team to be rattled and strike a defensive tone on its conference call with investors. Instead, the call was all business: detailed, candid and orderly.
Groupon CEO Andrew Mason and CFO Jason Child took every question, walked people through the numbers and tempered their optimism with facts. The focus was on the business performance; the stock price was barely mentioned.
That’s a big contrast compared to the technology boom of a dozen years ago.
Groupon’s announcement had none of the things that often were part of a tech company’s earnings in those days. There was no oddball accounting or incomplete financial data; no hype or hastily arranged new-product launches. (Ok, there was a bit of fluff around new market openings, but that’s forgivable.)
This rational approach has a lot to do with the experience of Groupon’s board and its senior management, many of them veterans of mature tech companies like Amazon and Google.
But we also can thank the SEC and the discipline that Sarbanes-Oxley brought to the public markets (a point made here by Jesse Eisinger). The regulatory process forced the company to change certain accounting practices and clarify Mason’s expansive comments in an employee memo that was later leaked to the press.
Groupon has a lot of business challenges, and anyone holding its shares is right to be worried about the sustainability of its growth rate (as Henry Blodget has observed). But for a newly pubic company, it’s handling investor communications just about right.