back to article Shareholder flings class action lawsuit at Groupon

The hits keep on coming for Groupon, as it now faces a shareholder lawsuit on top of another day of falling stocks, all over its materially weak accounting. Groupon shares dropped another few per cent in New York trading yesterday and now sit at their lowest point ever: $15.02. The stocks have been losing ground since the …

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Anonymous Coward

Exactly how are they going to get the money back?

Short of extracting the money personally from the funds raised by the Founders selling their shares on the float, it seems that investors would be simply taking money out of the company that they already own, making it more likely to run out of cash and go bust.

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Facepalm

Duh

Easy: First, sell the stock. Then, sue the company for the loss you made. At that point, you don't care if it does go bankrupt.

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Bronze badge

Re: Duh

3) Short the stock.

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Anonymous Coward

they have

Nothing in their account....

The END is nigh baby.

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Childcatcher

Didn't they read the bit about...

... share prices can go down as well as up.

In Groupon's case, down is inevitable.

Why anyone would want to "invest" in Groupon in the first place beats me. Speculate maybe, but not invest. What's the number one rule of "speculation"... only speculate money that you can afford to loose and never borrow to speculate.

I still see Groupon's woes as simply a tax on stupid greedy people.

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Re: Didn't they read the bit about...

Share prices can go down as well as up. But publicly traded companies are required to file their returns and statements with the SEC in an open transparent manner. And if they don't (e.g. they withhold information or overstate their books) then shareholders are perfectly entitled to sue them for it. Whether they win or not is another matter.

Personally I think Groupon was always a bad investment. There were more than enough shady stories about the company before it IPOd and it's not like it is a cash cow. It's modus is to slash and burn through one territory before expanding into another. This hyperexpansion can't be sustainable in the long term and it's not like they've ever made a profit.

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Re: Didn't they read the bit about...

"But publicly traded companies are required to file their returns and statements with the SEC in an open transparent manner."

This is exactly the point. Which it seems some people are missing. It's one thing to lose money on shares because the company has failed to prosper. It's quite another to buy shares based on legally required information only to find out it's not true.

That part is not much different to buying a physical object that turns out not to do what the salesman told you it would.

If Groupon can be shown to have knowingly filed incorrect information, the company's future could be quite bleak.

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Re: Didn't they read the bit about...

>only speculate money that you can afford to loose

as opposed to "only speculate money that you can afford to tighten"???

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Anonymous Coward

hahahahaah!

hahahahahahahahahahahahahahahahahhaahahha!

Or to put it another way; a fool and his money will always be parted!

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Re: hahahahaah!

Money parted from fool. Now fool wants money back.

I'm guessing he's heard about some Facebook stock coming up for options...

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Anonymous Coward

Since it's a class action lawsuit, it's likely those investors are eventually going to be awarded some Groupon coupons as settlement. Talk about irony...

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Joke

Discount?

If enough of them get together they might get a discount on their refund!

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Trollface

There's a pattern developing here...

A company that makes it's money by overselling discount coupons at overstated discounts (forcing small businesses to lose money), is discovered to be overselling stock based on overly optimistic profits (forcing shareholders to lose money)...

Well I didn't see that one coming!

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Seriously?

Nobody else saw this one coming?

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Re: Seriously?

I think everyone apart from those who bought stock saw this coming.

I don't have a massively tuned business brain, but when I first read about Groupon I couldn't figure out how it would ever make any money other than to fleece a few rubes trying to get rich quick & it looks like my instincts were correct (in this case).

Disclaimer: Do not get your investment advice from a commentard on The Register. Particularly not this one.

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