Groupon CEO Responds to Company’s Critics As Chicago Business Community Awaits IPO

Financial analysts have expressed skepticism over Groupon’s business model and some of its accounting practices in recent weeks, as the Chicago-based company’s prepares for an upcoming initial public offering.

Groupon CEO Andrew Mason has taken umbrage at the criticism. This week, he labeled it “insane” and “hilarious” in a three-page memo distributed to employees Thursday.

“We’ve bitten our tongues and allowed insane accusations … to go unchallenged publicly, it’s important to me that you have the context necessary to brush this stuff off,” Mason wrote in the memo, first reported by Reuters.

He defended the use of the controversial accounting tactic ACSOI, a measure that does not include online marketing expenses, stock-based compensation and other items, even as the company reported in its latest IPO filing that it had stopped using it.

Mason said U.S. revenue should rise 12 percent in August from the previous month and that marketing expenses would decline 20 percent.

The Chicago business community is closely watching the run-up to the Groupon IPO. Local investors and others in the city’s tech community see a successful Groupon as a potential anchor for a vibrant community of entrepreneurs, startups and tech companies.

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