Groupon releases new S-1, adds cautionary tone

As Groupon comes under fire for its losses, it adds words of warning in its amended S-1

As Groupon gears up for its big public splash, it’s coming under more scrutiny and facing blistering criticism for its business model and the huge losses it’s taken.  With nothing else to do but stew in silence, Groupon has been powerless to fight back (for the most part).  But it looks like all of the heat may be getting to Groupon, as the company released a new amended S-1 on Thursday evening with a few more cautionary tidbits.

As BusinessInsider first reported, the prospectus summary includes a few tweaks to spell out the company’s current financial situation in plain language: not profitable.  For example, the first prospectus summary read: “We increased our revenue from $3.3 million in the second quarter of 2009 to $644.7 million in the first quarter of 2011.”

Damn!  That’s awesome!  Groupon’s revenue went from $3.3 million in Q2 2009 to $644.7 million in Q1 2011!  What’s not to like?!?! (?!?!!!!)

The new S-1 adds a bitter note to that statement: “We had net income of $21,000 for the second quarter of 2009 as compared to a net loss of $102.7 million for the first quarter of 2011.”

Jesus!

There are a couple of bright spots.  The original S-1 noted: “We expanded from five North American markets as of June 30, 2009 to 175 North American markets and 43 countries as of March 31, 2011,” while the amended S-1 adds: “Revenue from our international and domestic operations was $346.8 million and $297.9 million, respectively, in the first quarter of 2011.”

And when it comes to subscribers, the original S-1 read: “We increased our subscriber base from 152,203 as of June 30, 2009 to 83.1 million as of March 31, 2011,” while the new S-1 adds: “A total of 43,014 customers purchased Groupons through the end of the second quarter of 2009 as compared to 15,803,995 through the end of the first quarter of 2011.”

Additionally, the amended S-1 includes a note to potential shareholders asking them to please ignore co-founder Eric Lefkofsky’s June 3 statement that Groupon is going to be “wildly profitable.”  The remark was published by Bloomberg, and in a note in the new S-1, the company explains that Lefkofsky did not consent to be interviewed and he requested that the statement not be published, since Groupon is supposed to be in a “quiet period” which prohibits it from talking about the company to the press and potentially artificially inflating its value.  Oops.

In less buzz-killing news, Groupon also added a slew of new underwriters, including J.P. Morgan Securities LLC; Allen & Company LLC; Merrill Lynch, Pierce, Fenner & Smith Incorporated; Barclays Capital Inc.; Citigroup Global Markets Inc.; Deutsche Bank Securities Inc.;
William Blair & Company L.L.C.; Citadel Securities LLC; Loop Capital Markets, Inc.; RBC Capital Markets, LLC; and The Williams Capital Group, L.P. 

In the previous S-1, Groupon listed only Morgan Stanley, Goldman Sachs, and Credit Suisse as its underwriters. 

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