NEW YORK ( Real Money) -- Investors looking for good news Monday had to search far and wide for anything not drenched in red. Greece, taking center stage once again, reminded traders around the world about the contagion effect -- and risky asset classes tumbled throughout the day. But one high-profile stock enjoyed a stellar session: Groupon ( GRPN) shares rose 18% during the day, and then jumped another 18% or so in after-hours trading. The reason behind the surge is pretty easy to identify -- Groupon's postbell earnings report generally beat analyst expectations, indicating to many that the company is back on the right track.At the risk of being a wet blanket and poo-pooing what most view as overwhelmingly positive news, the whole chain of events has to be a bit disconcerting. An 18% price jump on trading volume that is about 6x the daily average can be described as a lot of things. One of those is suspicions is this: If Groupon's performance Monday doesn't scream "insider trading" then I don't know what does. News of the impending earnings blockbuster clearly leaked well before the official release, as the huge spike in trading volume shows. It's clear that there aren't a whole lot of controls in place at Groupon -- a company that has made more than one material misstep when it comes to financial reporting and risk management. I have a sinking feeling that we're a few years away from the Groupon case study being a staple in every accounting major's curriculum. Groupon shares had been depressed in the first place partly because the company had been forced to restate its earnings. That embarrassing development came after the disclosure of aggressive accounting metrics in several other areas. Groupon supposedly took measures to beef up what it described as a "material weakness" in its internal controls through several senior level hires. But those internal controls don't exactly seem to be in top form now, as it seems I was one of the few people in Chicago who didn't know Groupon was about to blow past analyst estimates Monday. From where I sit, not far from Groupon's headquarters, it's fairly common to come across disgruntled employees who are seemingly eager to discuss the company's deteriorating culture. From what I can gather, it's the Wild West in the Midwest. Turnover is through the roof, and morale is through the floor. That is, of course, more qualitative and empirical reasoning for a negative outlook on the company, but they are factors worth considering nevertheless.
Moreover, there are plenty of other reasons to be bearish on the Groupon model. Competition is fierce and still intensifying. Profits are still elusive, and the long-term value add to customers is, in my opinion, negative. I was bearish when the stock dipped below $10, so I'm seeing the spike as an opportunity for those with the willingness to establish short positions. If you were skeptical about Groupon's business model before but didn't quite have the guts to short the stock (a description that fits me quite well), you might be tempted a bit more now that shares have surged 40% in a matter of hours. Throw in the fact that insider trading is apparently par for the course, and there's a strong argument building on the short side here. This is not the time to start chasing returns. If anything, it's once again time to short Groupon.