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Volatility in Management, not Markets, Gets Groupon to Hold Its IPO

What could I say to get their attention this time?
Groupon, which has seen more than its share of IPO-related slaps, has canceled its investor roadshow originally planned for next week and is reconsidering its IPO, according to the WSJ. A Groupon spokeswoman had a brief and succinct "no comment" for me. Maybe the company has figured out what "quiet period" really means.

According to the Journal, the supposed reason beyond the cancellation was market volatility in Europe. But given the number of missteps that Groupon has made so far in the IPO process, culminating in a CEO memo that leaked to the press, it could be that Groupon has finally decided to pull a Salesforce.com (CRM) and put off the IPO before getting into trouble.

Hurdling the gun
In 2004, Salesforce put off going public because of concerns over so-called gun jumping, or promoting a stock based on non-public information. CEO Marc Benioff had allowed a New York Times reporter to follow him for a day in the same month as the IPO was originally to take place. Salesforce filed a statement with the SEC that Benioff might have been in violation of legal restrictions on what a CEO can say during a quiet period.

Ironically, that original interview noted an old joke that Salesforce would always remain private because Benioff couldn't keep from talking during the quiet period. And yet, read through the interview and you see that Benioff didn't go nearly as far as Mason did in his memo.

I misquoted myself
Ah, that memo. Even if every word had been fact, Groupon would have had a problem, as Mason was discussing unreported performance and future plans. But the logic didn't hold up on top of it, and there was no way that Mason could deny having been the source.

Bradford Williams, the PR star the company had hired, walked out days before Mason sent the memo. It was the sort of move you'd see from someone who could see an unavoidable disaster coming and who didn't want to take the blame.

So, for all the talk of market volatility, it seems more likely that management volatility would be the reason Groupon would postpone its IPO. Permanently drop it? Given the company's addiction to growth and its cash limitations, that seems unlikely.

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