A Groupon Inc. (GRPN:US) shareholder sued the deal-of-the-day coupon company, claiming that its officers, directors and underwriters misled investors about its business performance prior to its initial public offering.
The company reported a “material weakness” in its financial controls on March 30 and said its first reported quarterly sales as a publicly-traded company were lower than previously stated because of higher refunds to merchants, reducing revenue in the quarter $14.3 million, to $492.2 million.
“Groupon’s internal controls were so poor and inadequate that Groupon’s reported results were not reliable,” investor Fan Zhang alleged in a complaint filed today in federal court in Chicago.
Zhang seeks class-action -- or group -- status on behalf of anyone who bought Groupon stock from Nov. 4 to March 30, and an award of unspecified money damages. Zhang owned as many as 3,000 shares from Feb. 9 to March 6, bought for as much as $21.75.
Groupon made its IPO on Nov. 3. Shares peaked at $26.19 on Nov. 18 and closed today at $15.02, its lowest price (GRPN:US) since the IPO. The company is based in Chicago.
Also named as defendants in the complaint are Chairman and co-founder Eric Lefkofsky, vice chairman Theodore Leonsis, co- founder and Chief Executive Officer Andrew Mason, six members of its board of directors and IPO underwriters including Goldman Sachs & Co. and Morgan Stanley (MS:US) & Co.
Julie Mossler, a spokeswoman for Groupon, said the company doesn’t comment on pending litigation.
The case is Zhang v. Groupon Inc., 12cv2450, U.S. District Court, Northern District of Illinois (Chicago).
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