Groupon stock slips as shareholder lawyers start to see the company as a juicy target. Will a lawsuit further depress the Groupon stock?
Charles Rex Arbogast/AP/File
Groupon stock has been falling since it revealed on Friday that it was revising its first quarter earnings to reflect a larger than expected loss. With its spotty accounting history, Groupon is now a juicy target for shareholder lawyers, who believe the company may be liable for the losses investors have suffered since Friday. The stock is currently down about 12 percent.
When it filed to go public with the Securities and Exchange Comission, Groupon’s accounting raised some red flags and the company eventually revised its financials with the SEC before its IPO. Considering all the scrutiny, the news on Friday that it’s auditor, Earnst and Young, said the newfound errors revealed ”material weakness in internal controls” piqued the curiosity of lawyers.
“When you do a registration statement there’s extensive due diligence so you would think this was uncovered at the time,” Jacob Zamansky of the New York-based law firm Zamansky & Associates, which represents investors, told Deal Journal.