Business

Groupon stock surges 20% after Eric Lefkofsky becomes CEO

Image Credit: swanksalot/Flickr

Looks like interim chief executive Eric Lefkofsky was just not ready to let go of the title. Groupon announced he would be taking over as permanent CEO today in its quarterly earnings release.

Lefkofsky, who at the time was executive chairman, took over as a co-CEO with vice chairman Ted Leonsis in February after the two ousted then-CEO Andrew Mason when earnings reports continued to miss. The company lost 75 percent of its value under Mason. Leonsis will move on to be chairman of the board. Leonsis said in a statement that the board was “encouraged by Groupon’s performance under Eric Lefkofsky as CEO.”

After the first quarter report, Groupon’s stock shot up 10 percent in after-hours trading, with investors impressed by what the co-CEOs were able to do with Groupon. At the time, Groupon earned $601.4 million in revenue. Today, the company’s stock rose 20 percent in after-hours trading.

Groupon is a “daily deals” service that works with local businesses to offer discounts on activities, products, and services through e-mail and its smartphone apps. In this second quarter of 2013, the company increased revenue 7 percent to $609.7 million with a gross profit of $384.7 million, down from the $433.2 million it saw in the first quarter of 2013.

Lefkofsky spoke about the ways he hopes to further boost Groupon during the quarterly earnings call.

“We can’t just serve our customers, we need to build a marketplace that serves the needs of both our customers and our merchants,” he said. “They should think of us as a trusted partner.”

The company’s United States business grew 45 percent this quarter, while EMEA (Europe, the Middle East, and Africa) dropped 24 percent and the “rest of the world” dropped 21 percent. Lefkofsky touched on this issue, saying that those abroad don’t have the technology we enjoy here in the U.S. to really make a difference in the company’s bottom line for that region. Groupon will reach deeper into those markets over time.

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