NEW YORK Online deals pioneer Groupon (GRPN) said Thursday it fired founder and CEO Andrew Mason amid worries that people are tiring of the myriad of online restaurant, spa and Botox deals that Groupon built its business on.
Shares jumped following Thursday's announcement, which had been anticipated for months. Executive Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis were appointed to the Office of the Chief Executive while a replacement is found.
"Groupon will continue to invest in growth, and we are confident that with our deep management team and market-leading position, the company is well positioned for the future," Leonsis said in a statement.
Groupon said Mason was not available for interviews.
The announcement came one day after online deals company Groupon reported a bigger-than-expected loss and gave a weak revenue outlook for the current quarter. The guidance had fueled investor worry that people are getting fatigued with the online deals flooding inboxes daily and that the company's efforts to broaden into an e-commerce powerhouse haven't been paying off.
Groupon, which went public in November 2011, makes money by taking a cut from the online deals it offers on a variety of goods and services. Investors have questioned whether that business model is sustainable and leads to growth over the long term - and whether the company can not only grow its customer base but make more from each subscriber.
Groupon has the advantage of being first. This has meant brand recognition and investor demand, as evidenced by its strong public debut. But the model is easy to replicate. It has spawned many copycats after its 2008 launch, from startups such as LivingSocial to established companies such as Google (GOOG) and Amazon.com (AMZN). Chicago-based Groupon also has faced scrutiny about its high marketing expenses, enormous employee base and the way it accounted for revenue.
Groupon's stock has lost about 77 percent of its value since the IPO after losing $1.45, or 24 percent, to close Thursday at $4.53. After the announcement of Mason's ouster, the stock gained 4 percent in after-hours trading following the announcement.