Mason Ouster Leaves Groupon Seeking CEO
San Francisco — Groupon Inc.’s decision to fire Andrew Mason puts pressure on Chairman Eric Lefkofsky to find a replacement who can create a money-making business after the daily-deal provider lost $723.8 million in the past three years.
As chief executive officer, Mason presided over a plummeting stock price, restated earnings and at least three quarters of results that missed analysts’ expectations. Mason, 32, addressed his ouster Thursday in a letter to employees, joking about needing a “fat camp” to lose weight even while accepting responsibility for Groupon’s shortcomings.
Lefkofsky, who co-founded Groupon with Mason in 2008, will run the company with Vice Chairman Ted Leonsis as they search for a new CEO. The board members are charged with finding fresh leadership while accelerating a risky push into e-commerce and away from daily deals, a market Mason helped create. His exit caps a tumultuous period that saw Groupon emerge from nowhere to hold the biggest technology initial public offering since Google’s — only to plunge on the public market.
“They grew too fast, and sometimes that can cause management to lose a little bit of focus on profitability,” said Arvind Bhatia, an analyst at Sterne Agee & Leach Inc. in Dallas, who recommends buying the shares. “Eric and Ted will bring in a new CEO with a strong operating background to move the company forward, so they not only grow the top line but more importantly the bottom line.”
Groupon, based in Chicago, climbed as much as 13 percent to $5.10 in extended U.S. trading after the announcement Thursday. The stock had plunged 24 percent at the close, following Groupon’s fourth-quarter earnings report, and through Feb. 28 had lost 77 percent of its value since the company’s November 2011 IPO.