Online-rebate wrangler Groupon
So today Groupon replaced two-thirds of its audit committee. Starbucks
The replacements come with the appropriate credentials. Robert Bass is a vice chairman of giant accounting firm Deloitte. Daniel Henry is the CFO of financial-services titan American Express
Two infusions of highly placed accounting expertise should do wonders for Groupon's accounting practices. But maybe the sweeping change didn't cut deeply enough.
The audit committee's chairman is staying put. You could argue that Ted Leonsis, Washington-area entrepreneur and owner of three pro sports franchises in the D.C. region, held the ultimate responsibility for getting the numbers right. Leonsis rubs shoulders with Dan Henry as an American Express director, but he doesn't serve on that company's audit committee. At the very least, Groupon shareholders should ask him to hand the chairmanship reins to either Bass or Henry when they arrive.
Accounting details aside, fellow Fool Tim Beyers thinks Groupon's business model is badly broken -- and I agree. Unless Dan Henry and Bob Bass can reshape the company's entire operating model (which of course they can't), Groupon is doomed to burn more cash than it makes forevermore. There's no way it's worth a $7 billion market cap. I'm slapping a thumbs-down CAPScall on the stock right now, only pausing to wonder why I didn't do it earlier. Turnarounds can make you rich, but this is just a sinking ship with no Coast Guard rescue in sight.