Analysts: Groupon May Be Falling Fast

By  |  April 3, 2012
 | 

Daily deals giant Groupon has seen a sharp decline in its stock value as questions about the company’s finances mount, according to a report by MSNBC.

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    After reports of “accounting errors” surfaced, the SEC has initated a review of Groupon’s financial results that were posted after the company went public.

    Jordan Rohan, senior analyst at Stifel Nicolaus, projects that the company could be facing a rough road forward.

    “This is a business model where [the company] is making it up or proceeding along a plan as we are following them as a public company. [I am concerned] that if the addressable market isn’t as big as they say it was, we will find that out in an unglamorous fashion over the next few years.”

    Additionally, reDesign principle analyst Rakesh Agrawal believes the problem lies within Groupon’s business model, which he calls “fundamentally flawed.”

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