The smallest violin the world is playing a song just for Groupon CEO Andrew Mason right about now. Groupon's stock plunge following its IPO, Mason's 7.7% stake in the company no longer qualifies him as a billionaire.
All together now, "Awwwwwww..."
Groupon's November 4 IPO debut yielded a veritable roller coaster ride, with the stock price, at one point, soaring 50% above its listing, then settling comfortably in the $26 range by the day's closing. By end of day, Mason's shares were valued at $1.2 billion. But things soon began to take a turn for the worse.
Groupon was trading fairly well in the first few weeks of November, ranging above its $20 IPO price. But the popular online daily-deal service tumbled drastically during Thanksgiving week, falling 16% to rest at $16.96 on Friday Nov. 25, giving "Black Friday" a whole different meaning for the company.
Analysts have speculated that Groupon's falling stock value can be attributed to concerns over profit margins, stiff competition from sites like Amazon and LivingSocial, and suffering international operations due to general recession woes, including the troubled Euro, as well as some tragically timed low merchant ratings.
Groupon shares were down 46% from their highest point, by Nov. 25's closing. Close to $9 billion of the company's value has been erased by their November market shellacking. Mason's stake in Groupon was valued at $1.2 billion at the end of the company's first trading day, but that value has fallen to $783 million.
Some analysts are saying Groupon will need to right the boat fairly soon, and pull in a strong Q4 with growing revenue and reduced market prices. Others assess the situation as slightly less grim, noting that even a $10 share value would be very impressive for a company that started only three years ago. Lynn Cowan of the Wall Street Journal notes that companies that went public in 2011 are down an average 8% from their original IPO price.
But all things being equal, these considerations probably don't take the sting from the memory of a reported $6 billion offer from Google to buy Groupon only one year ago, an offer that was declined. Poor Andrew Mason... At the moment the only thing up for debate is whether Mason's serenade by the tiniest violin should be subbed out for a sad trumpet.