Timing Is Everything: Groupon Inc (GRPN)

Ever since Aubrey McClendon stepped down as CEO of Chesapeake Energy Corporation (NYSE:CHK) I have felt the malaise that late night talk show writers must have felt after George “Dubya” Bush and Bill Clinton stepped down. No more sure thing to skewer. And no more sure thing to bet on before the stock rises when they leave to “spend time with the family.”

Still, there’s at least one CEO whose departure could unlock shareholder value. That king of corporate comedy would be Andrew Mason, CEO and clown prince of Groupon Inc (NASDAQ:GRPN) . Groupon now faces a somewhat binary future. Either its business model proves workable and the smaller deal competitors roll up their carpets and slink away or it just goes bust. Mason has famously said, “We have no margin for error.” The board may agree and on the urging of Groupon co-founder Eric Lefkofsky had been considering the ouster of Mason and finally decided to give him a few more quarters. That board is a pretty rough crowd. Groupon reports again on February 27.

CEO Mason is a little young to be pleading he needs to bond with the family, but shareholders would prefer a grownup in the room. Sure, it seems like Mason’s last summer gig maitre’d-ing at a trendy Japanese eatery is a king among the commoners deal but does it help improve Groupon as he says he was learning about the travails of small business? Or is it just the clown prince showing off? Or, worse, just goofing off? The beers during company meetings and accounting irregularities have not helped the image of Groupon as a serious publicly traded company, especially with a one year return of negative 70.61%. That’s just not funny.

Timing The Turnaround

His customers, the small business merchants, have been complaining for a long time about the lack of follow up and follow through from Groupon. They don’t want one-time looky loos who patronize them once never to be seen again. These merchants are just as likely to become the one time looky-loos of Groupon. They have plenty of alternatives like Living Social, backed by Amazon.com, Inc. (NASDAQ:AMZN) venture funding as well as Amazon Local Deals amid numerous other deal sites.

Groupon is finally trying to work out the disconnect between what merchants expect Groupon to do for business and what they actually get. To that end they bought Glassmap.com, a location sharing app for an undisclosed amount. What Glassmap will likely do is let Groupon know where you are, whom you’re with, and what you’re doing and then can localize and personalize deals to you.

Groupon Goods is another recent initiative meant to compete with eBay Inc (NASDAQ:EBAY) and Amazon offering deals on products instead of services. Just launched in NYC and Chicago the e-commerce offering will expand to many other cities.

To be fair, at the pivot point of Amazon’s success CEO Jeff Bezos was looked at askance as young and unfit for the position. His company’s business model was ridiculed but look at their success now… from a small online book business in 1994 to a $121 billion market cap global ecommerce dominator. As for eBay, it’s now a $73 billion market cap company since its humble beginnings in 1995 and the acquisition of PayPal has truly added value.

A Countdown For Mason

Mason only has one more quarter, tops, after this next release to really show the board (and shareholders) what he can accomplish. He may have to learn the hard way the most important facet of comedy, “Timing is everything.” Luckily for him Groupon has $1.2 billion in cash and no debt so he’s ahead of the game there.