Tomahawk, WI 8/09/2013 (Basicsmedia) – Groupon Inc (NASDAQ:GRPN) is one company that has the word “volatility” interwoven into every single seam. It has seen executives change like the weather does and new business models are experimented with as if by norm. All of this to distract investor attention from its flailing core business of coupons and daily deals.

The billionaire edges in

After numerous faux pas’ and shake-ups’ the company finally unceremoniously showed founder and ex-CEO, Andrew Mason the exit sign in February. Through all this turbulence, the one constant at GRPN has been the Chicago billionaire, Eric Lefkofsky. To a certain degree he also added fuel to the opposition that was brewing against Mason and even before the charismatic founder could step over the Groupon threshold, Lefkofsky started shoring-up control.

A change of season

Today, the controversial billionaire has ensconced himself comfortably in the Chief Executive Officer seat. GRPN promoted Lefkofsky from the interim co-chief executive role, and the ones who are heaving the biggest sigh of relief are probably the trouble-ridden company’s investors. There had been some expectation that the company would tap an experienced outsider for the position. It was just in May that GRPN had announced that it was scanning the market for a new CEO and that they were in talks with recruitment firms.

Some bright spots

Management stability is something that has been an alien concept with Groupon for a very long time now. Groupon shares soared 20% in after-hours trading on Thursday. What added impetus to the rise were the company’s Q2 results that were a shade better than revenue projections. In addition, the company had also announced a $300M share-repurchase program that would be staggered over a period of two years.

The right man

Yesterday, Ted Leonsis, the newly-appointed Chairman said that at the end of the day the company did not feel it had to look beyond its hallways. He said that Lefkofsky will provide Groupon with seamless leadership even as it is in restructuring-mode. He added that GRPN just had too much on its plate at the moment and that a transition in terms of a CEO was not something that the company wanted.

Leonsis said the coming years are very crucial for the company and that they are confident that at this stage, Eric Lefkofsky is the perfect fit for the job. The 43-year old Lefkofsky owns 17% of Groupon’s common stock and has control over 26% of shareholder-votes. The executive vice-president of DHR International Inc, a recruitment firm, said that the hold that Lefkofsky had over the board may have thwarted the company from looking for qualified external candidates.

In parting

In my opinion, a turnaround is not just about who is at the helm; it’s a lot about the workings of a maze of mechanisms. Capability and leadership are two attributes that have no rigid overtones. And Lefkofsky will have to find that potent mix of innovative ideas, concepts and restructuring strategies to yank Groupon Inc (NASDAQ:GRPN) from the depths it is currently wallowing in and catapult it into the sky.

 

Tomahawk, WI 8/09/2013 (Basicsmedia) –

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