Groupon’s Shaky Metrics Delay IPO

Income metric cited in a preliminary SEC filing has attracted the attention of the regulatory agency

Here's a deal that Groupon wasn't anticipating. Or hoping for.

The Securities and Exchange Commission is looking into Groupon's accounting methods after the company's S-1 filing for its initial public offering raised eyebrows among potential investors and, apparently, the SEC itself.

This review is delaying Groupon's IPO, but according to CNBC, the coupon company still intends to press forward with the offering. 

Groupon's S-1, initially filed on June 2, showed remarkable growth for the company. It generated $644.7 million in revenue for the first quarter of this year, versus $713.4 million for the entirety of last year, and $30.47 million for all of 2009.

The metrics that the company employed in the initial filing raised red flags among some observers. Groupon's use of an adjusted consolidated segment operating income, does not take into account many expenses, including “online marketing expense, acquisition-related costs and stock-based compensation expense” came under fire. 

Groupon filed an adjusted S-1 earlier this month, which clarifies that the adjusted figure is "not a valuation metric," but merely a tool to offer "visibility into our business."

Apparently, the clarification only raised further questions, as far as the SEC is concerned.

The SEC and Groupon did not immediately respond to TheWrap's request for comment.