Groupon Inc (NASDAQ:GRPN)’s New Operations Chief
Promises to Turn Around Company in two Quarters
Daily deals site Groupon Inc (NASDAQ:GRPN)’s new
operations head has his work cut out for him.
Heralded as a fast-growing company with a sound
business model, the company has floundered in recent months.
The shares of the company have fallen about 75 percent
since its IPO in November 2011. The economic crisis in the Eurozone has slowed
down its revenue growth. Its Groupon Goods business, a low margin activity, is
seen to be squeezing its profitability.
Former Amazon executive Kal Raman, who took charge in
April, is trying to overhaul the functioning of the site and convincing Wall
Street analysts that Groupon that it is serious technology firm and its
business model is still robust.
Can GRPN
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One of the first things that Raman has done is to
overhaul its payments system, streamline its sales support functions and
introduce new technologies.
He is also overseeing the daily operations of the firm
now, taking over from co-founder and Chief Executive Andrew Mason, who is
facing a crisis of confidence, especially after the weak second quarter results
of the company.Raman has promised that the results of his
restructuring will be seen in another two quarters from now.
"The buck stops here," he said in an
interview to Reuters, adding that Mason should no longer be held accountable
for lack of revenue growth.
Wall Street analysts are more optimistic about the
company with Raman at the helm of affairs as they feel he has the requisite
experience to run the company.
Shares of GRPN are up over 1% in early trade.
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