Affected by the revised financial data released by the largest U.S. group buy site Groupon (NASDAQ:GRPN) last Friday which led to the U.S. Securities and Exchange Commission (SEC) investigated on Groupon and the Groupon shareholders were prosecuted. Groupon’s stock price fell again on the Nasdaq stock market on Tuesday, recording a new low of closing price since the company’s IPO (initial public offering) last November.
The indictment pointed out that Groupon had reported false revenues and released seriously inaccurate and misleading financial statements, hidden the slow down in growth and the fact that the company is facing fierce competitions. Groupon also did not disclose the fact of internal mismanagement and concealed multiple another facts failing to comply with the state laws.
Groupon’s stock price closed at $15.02 on Tuesday, a decrease of 1.67%, or $.25 compared with the previous day. In Monday’s regular trading, the Groupon’s stock price declined by 17%. The lowest Groupon’s stock price was $14.85 and the highest was $31.14 since its IPO. Groupon sold shares at an issue price of $20 in its IPO.
Groupon said the company has substantial defects in financial controls on the March 30, and the company’s fourth quarter revenues are actually lower than the data in the financial statements previously provided. Given these, Groupon lowered its fourth quarter revenues by $14.3 million to $492.2 million. The increase in the amount of refunds led to the growth in operating expenses and an addition of $22.6million, or 4 cents per share in net loss. Groupon had previously projected the company’s 2011 fourth-quarter revenues would reach $510 million to $550 million and operating profit would reach $15 million and $30 million. Group released the financial statements for the first time since its IPO. Read more about the Groupon’s revised financial data.
Quoting the News from Wall Street Journal, the U.S. Securities and Exchange Commission is investigating the financial data revisions by Groupon. The source said the investigation is still in its early stage and not a formal investigation.