Groupon's Books Face Renewed SEC Scrutiny

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Aug. 19 (Bloomberg) -- Groupon Inc. said it will disclose more detail about its financial performance after the U.S. Securities and Exchange Commission asked the largest daily-deal website to revise some of its accounting practices. Bloomberg's Cory Johnson reports on Bloomberg Television's "Bloomberg West." (Source: Bloomberg)

Welcome back to "bloomberg west." i'm emily chang.

We have breaking news about groupon.

The sec is pushing for the company to disclose more financial details.

Cory johnson is back with us.

You have scrutinized groupon since the beginning.

What is the latest twist?

These are comment letters.

There is a process by which the best pc queries companies in private about their accounting.

We do not a understand this, or we have some issues about this.

All this happens in private.

Later, these letters are published by the sec, and sometimes they are hard to find because they are published on the original days.

Some of these go back to may come in june, july.

Of course, we know what has happened to their stock.

They have been beaten so much from its pre-ipo days.

But we have seen a recovery in shares over the last six months or so, it is substantial move of shares more than doubling.

Among the questions for the sec is, wait a minute, the way you are saying things is not clear to us.

They have a staff that scrutinizes the financial filings and statements of companies.

Specifically, some questions about gross billings.

The sec looked at the number and said it did not make sense.

The presentation of gross billings appears confusing and potentially misleading.

Groupon responded by saying -- and they went on to say that they would change the way that some things are reported and actually give up some more metrics that were given out in the past.

Groupon had to restate its financial before the ipo.

What is wrong now?

They have a history of accounting for things in different ways that the sec wants.

They have not been able to file things in keeping members current like every other company.

So they are not just getting picked on by the sec?

They have done things wrong, over and over again.

Those things have tended to make the company look better, specifically in terms of revenues.

Now they are asking questions about gross billings and also about their european they have a unit, which was really important in their pre-ipo days.

They have something similar in europe and the sec is asking questions about the book value of that business.

Groupon putting some new information out there and defending their accounting, but once again, it is safe to say the sec has more questions, which has been the story of the company from the start.

Even though ceo andrew mason is gone,. on that note, this is not a team that does not have experience taking companies public.

Why are we seeing these kinds of the stakes, misleading things?

They have four companies that went public.

One of them went bankrupt.

Accounting issues, restatements have seemed to follow the investments they have taken public.

It is something to keep an eye on.

For investors looking at this thing -- we do not do investment advice -- but look at the company and if the numbers are shifting around and the description is harder and harder, it is tough to figure out what the business is.

Thank you.

More after the break.


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