Groupon founder Andrew Mason is out as CEO, according to a news release, and the company’s board is already on the hunt for a replacement.
In the interim, executive chairman Eric Lefkofsky and vice chairman Ted Leonsis are in charge, and the board has appointed them the newly created “office of the chief executive.”
The news is no surprise, and rumors have been circulating for weeks. The daily deals site just lost a fifth of its value and reported disappointing quarterly losses.
The board of directors will be on the hunt for fresh leadership to turn the company’s fortunes around. Its stock took a 20 percent hit after the earnings report came out, but it is now up more than 10 percent on the news of Mason’s ouster.
In particular, the Groupon Goods business, which sells merchandise to consumers, has been deteriorating in the U.S. and abroad. Losses for the Chicago-based company, which sells discounted deals to consumers, reached $81.1 million in Q4 2012, wider than its $65.4 million loss in the previous year.
“On behalf of the entire Groupon board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon. As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history,” said Lefkofsky in a statement.
Lefkofsky provided the company’s startup cash and received the largest chunk of its equity made $382 million selling off Groupon shares before the company filed for its IPO, at prices as high as $15.79 per share.
“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 added.
Mason offered his comments in a farewell letter that appears to have crashed the site it was posted on. “After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family,” he wrote. “Just kidding – I was fired today. If you’re wondering why … you haven’t been paying attention.”
If all else fails, Mason has a bright career ahead of him writing corporate memos. Read the refreshingly honest account below.
People of Groupon,
After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.
You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company – it’s time to give Groupon a relief valve from the public noise.
For those who are concerned about me, please don’t be – I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.
If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness – don’t waste the opportunity!
I will miss you terribly.
Will a change in leadership be enough? Please share your thoughts on Groupon’s “second chance” in the comments below.