Groupon

The company was founded in November 2008 by Northwestern University graduate USA Andrew Mason.

Performance indicators

2014: Revenue up 24%

The company's total sales grew by 32% and amounted to $7.6 billion, compared to $5.8 billion in 2013. Revenue increased by 24% and reached $3.2 billion in 2014, compared to $2.6 billion in 2013. Gross profit was $1.55 billion in 2014, compared to $1.50 billion in 2013.

Adjusted EBITDA was $253.4 million in 2014, compared to $286.7 million in 2013. SG&A expense associated with Ticket Monster and rising global marketing costs affected.

The 2014 indicators were affected by losses due to the unstable exchange rate of $31.5 million (before taxes).

Business in Russia

In 2010, Groupon acquired Russia the site Darberry.ru. In 2016, the company left the Russian market. The Groupon division Russia came under the control of the Leonid Boguslavsky Foundation and was renamed. In Frendi early 2016, the company also curtailed operations at. To Ukraine

History

2022: 3,675 employees

Data as of 2022

2018: $57 million payout to IBM for patent infringement

On October 1, 2018, Groupon announced the settlement of a patent dispute with IBM, following which the Internet group discount service will pay the opponent $57 million. The companies also entered into an agreement on mutual licensing of patents.

The lawsuit, which IBM filed against Groupon in 2016, contained charges of infringing four patents. One of them describes the technology of "single sign-on" - quick authorization in the online store using social networks. IBM claims that other large companies, including Amazon, Google and Facebook, use the developments that Groupon illegally used only after transfers of about $20-50 million.

In July 2018, IBM asked the court to recover about $167 million from Groupon, citing the fact that Groupon used widely licensed technologies that play a decisive role in the development of the Internet. The jury trial stopped at $83 million, and the total amount was even lower - $57 million.

IBM sued $57 million from Groupon for illegal use of the authorization system through social networks

The license we purchased from IBM will allow Groupon to continue building amazing products for consumers and small businesses around the world, said Bill Roberts, Groupon's vice president of global communications.

IBM General Manager of Intellectual Property William Lafontaine noted that the agreement with Groupon demonstrates the value of the company's developments, which are based on an annual investment of more than $5 billion in research and development. In 2017, IBM's revenue from the licensing business amounted to about $1.2 billion.

During the court hearings, a lawyer for Groupon argued that IBM was making claims on outdated patents in an attempt to threaten the court to make money on other IT companies. Groupon asked the judge to overturn the verdict or reduce payments to IBM, since the company believed that the accusations of the American corporation were not supported by evidence.^[1]

2012

Profit in the second quarter and loss again in the third

Groupon suffered a net loss of $2.98 million in the third quarter of 2012, according to a press release from the company.

Thus, Groupon again became unprofitable after it recorded its first profit in a long period in the second quarter of 2012. In the first quarter of 2012, the company was also unable to become profitable.

According to Bloomberg, the Internet company also showed worse than expected revenue figures. Groupon sales from July to September 2012 amounted to only $568.8 million, while analysts were counting on 591 million. Revenue outside the United States fell by 10 percent compared to the same period in 2011.

Groupon is set to take a number of savings measures, notably cutting 80 sales managers by increasing its share of automatic trading. As of November 2012, the company provides 12.8 thousand employees.

Revenue is expected to reach $625-575 million in the fourth quarter of 2012. The company intends to significantly improve its work abroad, primarily in Europe, since losses are mainly caused by the international division.

As of November 2012, Groupon shares were down a total of 80 percent after the company went public in November 2011.

Stock collapse, Mail.ru Group sells its stake

On August 12, 2012, The Wall Street Journal wrote that sales managers were leaving the company en masse.

On August 14, 2012, shares of Groupon, the largest discount service, fell more than 22 percent to $5.86 at the beginning of trading. The capitalization of the service fell below five billion dollars.

On the eve of the company reported on the results of work in the second quarter of 2012, and the data on revenue were worse than analysts' expectations. The service's quarterly revenue rose 45 percent year-on-year to $568 million, but analysts expected it to increase by 573 million.

Even the company's profit data did not prevent Groupon from falling quotations. If in 2011 in the second quarter the loss of the service amounted to $107.4 million, now Groupon has returned to profit, earning 28.4 million in April-June.

As a result, Groupon shares have fallen nearly 75 percent since the IPO, and nearly 65 percent since early 2012.

In November 2012, it became known that the Mail.ru Group had completely left the shareholders of Groupon. When Mail.ru Group entered the London Stock Exchange in November 2010, it owned a minority stake in 5.13% of Groupon.

2011

Loss at the end of the year $350 million

At the end of 2011, the company's loss reached $350 million.

NASDAQ Stock Offering

In June 2011, it became known that Groupon would hold an IPO. During the IPO, the company intended to raise about $750 million, its capitalization is estimated at $20 billion. The exact parameters of the offering, as well as which of the shareholders and how many shares will sell, have not yet been determined.

On November 4, 2011, Groupon's initial public offering took place on the New York NASDAQ exchange. The initial price of the placement of shares, which were traded under the ticker symbol GRPN, amounted to $20 per share, but in the first minutes after the start of trading it increased by 40% to $28. During the trading session, the value of securities reached a maximum value of $31.14 apiece, which corresponded to a 56% increase compared to the offering price^[2].

Trading ended at $26.11 per share, which was 31% higher than the initial value. The total capitalization of the company on the basis of this price rose from $12.7 billion before the IPO to $16.6 billion. This made Groupon a more expensive company than Adobe Systems, and almost equal in price to Yahoo, writes the Wall Street Journal.

It should be added that Groupon, like the social network LinkedIn, placed only a small number of its shares in the IPO - 35 million or about 5.5% of their total amount of 637.3 million.

During the IPO, Groupon sold newly issued shares (existing shareholders, including Mail.ru Group, could not sell their packages) and raised $700 million. This is the second result among American Internet companies after Google, which in 2004 raised $1.7 billion during a similar event. For comparison, the world's largest social business network LinkedIn raised $352.8 million in May 2011.

Negative comments dominate Groupon's IPO. Thus, the author of an article in the Washington Post called Groupon a "bubble" and does not recommend buying its shares. In turn, the Wired business model Groupon considers too simple and limited, and note that it is quite easy for companies to compete - among others, the LivingSocial project does quite well.

The author of The Daily Beast, citing analysts, claims that there is confusion in Groupon, and it is too risky to invest in this company. The host of the popular stock market show on CNBC, Jim Cramer, said Groupon's IPO is the most inflated and artificial it has seen since the dot-com crash.

After the first trading, the shares rose to $26, but later they began to fall in price, as investors were disappointed in the financial results of the service.

Alisher Usmanov invests $151 million in Groupon

In June 2011, it became known that Mail.ru Group and DST Global Alisher Usmanov invested $151 million in Groupon, receiving a total of 7% of the company's shares. The market value of the package may be $1.5 billion.

The discount service Groupon, in preparation for the IPO, disclosed information about the investments made in it. In particular, in April 2010, Mail.ru Group, then known as Digital Sky Technologies (DST), acquired 3.1 million Class F preferred shares for $100 million. And in January 2011, the DST Global fund bought 1.6 million Class G preferred shares for $51 million.

Thus, in total, the Russians invested $151 million in Groupon. Earlier it was already known that Mail.ru Group and DST Global own minority Groupon stakes, but the amount of investment was not disclosed.

In Groupon's preparation for the IPO, each Class F share will be converted into 6 Class A ordinary voting shares and each Class G share into two Class A shares. Thus, Mail.ru Group will own 18.6 million Class A shares, DST Global - 3.2 million. The shares of these companies in the authorized capital of Groupon will be approximately 6.2% and 1%, respectively.

In voting actions, the shares of Russians will be even smaller. The fact is that Groupon, like Mail.ru Group and Yandex, uses protection against unfriendly takeover by dividing voting shares into two types: ordinary (one share - one vote) and "super-voting." Yandex has one "super-voting" share of class B corresponds to 10 votes, Mail.ru Group has a similar share of class A - 25. How many votes Groupon will have for one "super-voting" Class B share has yet to be decided.

Groupon's main owners of Class B shares are its three founders. CEO Andrew Mason and Chairman Eric P. Lefkofsky own 500 thousand Class B shares through Andrew Mason Trust and Green Media, respectively, and Board member Bradley Keywell through Rugger Ventures - 200 thousand shares.

Based on preliminary estimates, the Mail.ru Group gjckt IPO package will cost $1.24 billion, DST Global - $200 million. In this case, Mail.ru Group may earn more than $1.1 billion from its investments in Groupon, DST Global - $150 million.

Raising $950 million for the development of the service, including from Russians

In January 2011, it became known that Groupon raised $950 million for development. Some of these funds were provided by the Russian DST Global fund Alisher Usmanov, Yuri Milner and Grigory Finger^[3].

New investors include Andreessen Horowitz, Battery Ventures, Greylock Partners, Kleiner Perkins Caufield & Byers, Maverick Capital, Silver Lake, Technology Crossover Ventures. In addition, the Russian DST Global, which still owned 2-2.5% of Groupon, took part in the investments. Another 5.13% was held by Mail.ru Group, which shares shareholders with DST Group, but did not participate in the new round of investments. A DST Global spokesman did not specify the size of the fund's new investment in Groupon.

If at the end of 2009 Groupon had about 2 million customers, now there are more than 50 million of them. In just a year, the company's business expanded from one country (USA) to 35 (including Russia, where Groupon acquired a similar Darberry service), 58,000 trading and service companies became partners of Groupon.

More than $300 million of the total amount raised will be used to buy back shares from nine members of the board of directors of Groupon, including its founder and CEO Andrew Mason, and from affiliated structures. Groupon uses the rest of the funds to develop the business, the mission of which Mason calls "changing the way people shop."

2010

Yahoo! and Google are trying to buy Groupon

As of August 2010, Groupon operates in 165 markets and plans to expand operations to 230 markets in 29 countries.

Until December 2010, Yahoo! Made an offer to buy Groupon co-owners, it estimated the service at $3 billion.

On December 4, 2010, it became known that Groupon owners refused to sell the company to Google Corporation, which offered $6 billion. Members of the board of directors of Groupon disagreed about the deal and decided: the company will remain independent for now, and will hold an IPO in the future.

Information that Google is close to buying Groupon appeared last week. Then the WSJ-owned All Things Digital reported that Google valued the discount service at $6 billion. This was confirmed by Vedomosti two sources close to the negotiators. Part of the money ($3.5-5.3 billion) Google was ready to pay immediately, and the rest - with a delay; the balance was due to Groupon employees and was tied to its future financial performance.

For two years (until December 2010), Groupon raised about $171 million from angel business and funds Accel Partners, New Enterprise Associates, Battery Ventures, as well as Russian Digital Sky Tecnologies (DST). Most of it, $135 million, was invested in April 2010 by DST and Battery Ventures. As of December 2010, Groupon shares purchased by Russian investors were distributed between Mail.ru Group (5.13%) and DST Global (2-2.5%). In the case of a deal with Google, Russian investors would have earned up to 700% per annum in 7-8 months, but the deal did not take place.

Deductions from transactions in the amount of $50 million per month

Earns Groupon on deal deductions; as of December 2010, this is about $50 million per month. 2010 revenue forecast - $600 million.

Notes