The Five Dumbest Things on Wall Street This Week: May 4
5. Mason's Maturity
No. No. No. Groupon(GRPN) , you've got it backwards! It's the coffee sipper that needs to stay and the beer swiller that needs to go.
The Internet deals site said Monday that Starbucks(SBUX) Chief Executive Howard Schultz and venture capitalist Kevin Efrusy will leave its board of directors, and be replaced by Robert Bass, a Deloitte LLP vice chairman, and Daniel Henry, chief financial officer for American Express. Both new members will serve on the board's audit committee, ostensibly to shore up the company's accounting practices.
Shares of Groupon sank more than 10% to $10.71 following the news of the board reshuffling, as investors bemoaned the loss of Schultz, even as Wall Street analysts applauded the addition of increased "adult supervision" in the wake of last month's fourth-quarter earnings restatement. Groupon's stock has lost more than half its value since last November when its high-profile IPO priced at $20 per share and popped as high as $26 on its first day of trading.
Let's stop there for a second so we can be honest about the real problem that presumably led Schultz to bolt Groupon's board, because in our admittedly Dumb view it's much more than a lack of parental supervision over its number crunchers. (Heck, accountants join boards in order to get out of those particular weeds, so why should we expect Groupon's new board members to change things for the better?)
No, what's plaguing Groupon has to do with its daddy issues. And by daddy, we mean the company's founder and current CEO Andrew Mason.
It was only last summer, if you remember, that Mason's big mouth caused a stir at the Securities and Exchange Commission and endangered the company's IPO. The expectation was, however, that Mason would grow into his executive role as many other young Internet executives have done before him.
Alas, Mason has not yet matured. According to a recent Wall Street Journal article, the 31-year-old CEO was caught addressing his troops under the influence of alcohol. At one juncture in the town-hall style meeting, Mason was forced to stop and apologize, saying, "Sorry, too much beer."