Can Groupon Inc (NASDAQ:GRPN) be Saved by Going Private?


There are indications almost everywhere that all is not well with Groupon Inc (NASDAQ:GRPN). The company appears to be overwhelmed by the challenges of public life, which leads to the question about whether Groupon should go back to the drawing board.

So far this year, Groupon Inc (NASDAQ:GRPN)’s shares are down more than 60%. On the operating front, revenues have continued to shrink quarter after quarter. That is happening at a time when the company is facing stalling growth in North American and almost no growth at all overseas.

Great vision
Looking back, Groupon had and still has a great vision. The company’s Merchant OS strategy has a future, given that it helps vendors to expand their exposure and reach without upfront investment that they would normally require if they choose to go it alone. Being a shoulder for the small businesses to lean on, Groupon can play an integral role in the growth of merchants and also grow its numbers in the process.

Long-term play
The problem is that the company’s vision is a long-term play, yet the management has recently appeared to favor short-term executions. The management’ needs to be committed to executions that add value to the long-term outlook rather than short-term measures to please the public market. It sees that the pressure to impress Wall Street have resulted in Groupon abandoning its long-term outlook for quarterly earnings. The shift of attention from long-term to short-term also led Groupon into risky international expansion, which has backfired.

Going private
Perhaps privatization may help Groupon Inc (NASDAQ:GRPN) to reorganize itself quietly. Given that the company already has a great vision, what the management needs to rediscover is that Groupon’s model is long-term play, which is why it cannot afford to do things like everyone else in the deals market.

Reshaping of the long-term vision and attracting new talents can happen faster if Groupon Inc (NASDAQ:GRPN) exits the public market. But who will take Groupon private? There are many investors who believe in the Groupon story and they can be the ones to take the company private to allow it restructure away from the public market noise.

Sources: techcrunch