

Groupon's accounting practices under SEC scrutiny - Suraj-Sun
http://www.itworld.com/software/187277/groupons-accounting-practices-under-sec-scrutiny

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jackowayed
They reported all the normal numbers too, right? (Straight revenue, earnings
calculated the normal way, etc.)

I don't really see why it should be illegal for them to include some extra
numbers, regardless of how meaningless they are, as long as they fully explain
how they calculated them. If investors don't buy Groupon's claim that their
marketing costs will go away once they win the market, they can just look at
the standard numbers.

Then again, I don't know much about S-1's and how much freedom one generally
has to put more than the very essential information in them.

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jerf
"I don't really see why it should be illegal for them to include some extra
numbers,"

For "extra numbers", substitute "lies with statistics", and it'll become
clear. This application isn't the place to give the company a free-form field
to put its propaganda in.

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pseudonym
Considering the glut of posts from a couple weeks back about Groupon, along
with the tone of every single one of them, the only thing I'm surprised about
is the SEC apparently actually taking it seriously.

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byrneseyeview
Ironically, GAAP numbers are easier to game than what Groupon is reporting.
For example, if Groupon were to slash their marketing budget in order to meet
their earnings estimates, you'd see better net income but a minimal change in
CSOI.

It's just strange for this to be so controversial.

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maukdaddy
Yes, but such manipulation is much easier to spot given everyone's familiarity
with GAAP.

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byrneseyeview
If everybody is so familiar with GAAP, the SEC's case is much weaker. They're
arguing that investors will be too unsophisticated to differentiate between
this new, weird accounting measure and the usual standards.

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hornokplease
Story sourced from CNBC, submitted here:

<http://news.ycombinator.com/item?id=2813186>

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fleitz
How is it possible to lose money with cooked books?

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prodigal_erik
If I couldn't plausibly be profitable, I still might want to convince people
I'm losing less money than I actually am.

