Groupon needs a controller's office with some self respect. What is this bullshit quote by the CFO: "We remain confident in the fundamentals of our business"? That is not your job. You work for me as the shareholder, and your job is to get the fucking numbers right. Because finance and accounting functions both fall under the CFO causes many CFO's to forget that they are supposed to behave as controllers much of the time.

My accounting buddy says 'Material Weakness' is code for accounting fraud.

If so, it explains why Andrew Mason and Eric Lefkofsky massively cashed out pre-IPO, and may have left everyone else holding the bag.

Why is no one calling this out as FRAUD? They clearly and intentionally inflated results... a 200% difference off net income.

Why is the SEC and FBI not investigating? And why are there no class-action lawsuits coming together already?

Groupon seems to have a history of questionable bookkeeping. HN community saw this( http://news.ycombinator.com/item?id=3270165) way back when.

Edit: Added link to previous GRPN discussion

This will probably fall on deaf ears because HNers love to hate Groupon but does anyone here realize how difficult it is to account for financials that went from $14 million to $300 million to $1.6 billion over 2 years (with a great deal of it from very recent international acquisitions)?

Groupon's stumbles come as Congress advanced a bill, known as the Jobs Act, that would ease the regulatory burdens on fast-growing businesses. Under the act, Groupon, which has less than $1 billion revenue, would qualify as an emerging growth company, entitled to immunity from annual audits of internal accounting controls.

The Jobs Act would loosen Groupon's duties "over exactly the type of controls that it was deficient in," said John Coffee, a law professor at Columbia University.

Hm. I like the idea of easing the regulatory burden on emerging business, but anything with under $1 billion in revenue? That leaves room for a multitude of sins.

"Groupon has become a bellwether for a new generation of technology companies that, using technology, are able to build massive scale over short periods"

If by technology, you mean lots of venture capital, and lots of money to throw at Facebook ads + Adwords...

"The fastest growing company ever" can't get its book right? Shocking.

Guys. This is bad news. But it's a tiny, transient issue, which they've already corrected.

If you're serious about considering this evidence of fraud, it would be great to get an idea of how much you've shorted since the story came out (or plan on shorting Monday morning). Groupon's stock is down about 6% after this story, and I don't see any comments that indicate that this raises the odds that Groupon will collapse by a mere 6%.

While there are lots of flaws with Groupon's current model, it's not very nice to jump on them for comparatively minor stuff like this.

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So the underwriters have no accountability in any of this? Not a single mention of them in the article, go figure.

And the bubble pops!

Wow this surely signals the end of GroupOn. What a stupid company. They are a big joke and nothing they do is right. This is literally an unheard of mistake... no other company has done anything like this (and survived).

Why anyone ever invested here, why I didn't think fthe stupid idea first, I'll never know