Groupon Still Cleaning Up PR Mess With Fourth IPO Go-Round

… Gene Marbach, group VP at Makovsky + Company, says that in advance of an IPO there is only one PR tactic: to keep your mouth shut. "We advise all our clients—especially in a high-profile situation like Groupon's in which every outlet is going to report on you—to stay within the prospectus book," says Marbach. "Playing by the rules may be against what your company was founded on, but you have to be circumspect."

Companies that push the boundaries of disclosing information before an IPO jeopardize a major payday and one of the company's most important moments. "Who knows what can happen by Monday— the market might be down 500 points and you're going to try and get an offering off," says Marbach.  "We're in a very fragile time right now from an economic standpoint, and you can’t mess up something like this from a communication standpoint."

With its fourth IPO iteration, and with banks like Goldman Sachs as the lead underwriters and high-power attorneys involved, Marbach wonders how an organization could’ve let an accounting discrepancy slide through the cracks. "It looks to me like they're simply making this stuff up as they go, and it doesn't feel like a finished model," he says. "Yes, it's a young company, but it still should be buttoned up and fully vetted before we get to this point."

Marbach says the negative attention may cause some investors to shy away due to accounting and management concerns. "If I were an investor and saw they changed the way they were doing something, I wouldn't feel secure the company was fully focused," he says. "Whereas you look at a well-developed company, they follow all the governing rules out there and are perceived as a fully-formed product." …

… Though wrought with communications mistakes so far, Marbach hasn’t ruled out the possible success of Groupon’s IPO. “It will probably go off and be successful, thanks to its cachet in the daily deals industry, but they certainly didn't make it any easier on themselves." ...

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