Groupon also landed itself in trouble with the SEC by failing to adhere to the "quiet period" norms which prohibit a company from making public announcements for a specific duration before it goes public. After the release of Andrew Mason's leaked memo, which contained forward-looking financial statements, investors started becoming more wary of the company's leadership and conduct.
With low barriers to entry and a highly duplicable business model, Groupon's competition is only expected to increase further. In addition to the big players such as LivingSocial and Google Offers, the daily discount market is flooded with hundreds of daily deal clone sites. This is expected to make the market more fragmented in future, making it difficult for Groupon to maintain its dominance. We believe this visible increase in competition in the last several months has contributed to the fall in valuation for the company.
We recently launched coverage on our analysis of Groupon with a $7.9 billion valuation estimate.
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