Groupon PR to peHUB: Call Us Before You Write Another ‘Nastigram’

For a company that’s in registration to go public and thus forbidden from pumping up the company stock in advance of an IPO, Groupon is having an awfully hard time keeping quiet. Last week, of course, a memo from Groupon CEO Andrew Mason to employees about “insane accusations” being reported about the company’s financials was mysteriously leaked to the popular tech blog AllThingsD.

Yesterday, our colleagues at Reuters reported that “Groupon spends millions of dollars enticing new subscribers, but the largest daily deal company wants to slash that cost to zero in less than three years, a big part of its quest for profitability, according to two people familiar with the company.”

But the kicker may be the email I received about the company late yesterday afternoon from Brunswick Group, a corporate communications firm employed by Groupon.

One of its partners, Michael Buckley, emailed me and asked me to call him roughly five minutes after I posted a piece about Groupon on peHUB. In our phone conversation, he claimed my post was “inaccurate” and “silly.”

In my story, I cited two analysts, one of whom — Scott Sweet, the principal researcher of Tampa-based IPO Boutique — told me that market rumors ascribing Groupon a valuation of $25 billion were “colossally absurd.” I also quoted Sam Hamadeh, founder of the private company research company PrivCo in New York, who said Groupon will be bouncing payroll checks in six months if it doesn’t go public or raise more money from investors.

“Groupon does not need to go public to fund its operations,” Buckley retorted. “And writing that Groupon is having a tough August is completely inaccurate.” (I’d said the press had been tough on the company in August.)

Buckley went on to explain that while numerous reporters have written articles about issues with Groupon’s two S1 filings –- namely that Groupon is paying a lot of money to acquire customers, and that those customers are spending less and less with the company –- I would find very different information if I looked at the S1 filings myself. “[Groupon has] actually grown its subscriber numbers,” Buckley said. “It’s reduced its marketing spend, with net losses going down. And the company has increased its revenue.”

Indeed, suggested Buckley, if I would only turn to that “leaked memo by Andrew Mason, you’d see that revenue is up 12% month over month.” Actually, in that memo, Mason wrote, “[T]hanks to a tremendous effort by our sales team, August in the U.S. is shaping up to be a pivotal month. It appears that will revenues grow by about 12% over last month (which is a lot), while we cut our marketing expenses by 20% in the same period.”

Buckley concluded by asking me if I would please call him the next time I plan to write a “nastigram” about Groupon. I said I would (I will) and asked if he’d like me to update my post based on his comments. He said no, saying I could find all that I needed in the company’s S1 and in Mason’s memo. (He did not say that the conversation was off-the-record. Had he said this, I wouldn’t be writing about it here.)

I don’t begrudge Brunswick for wanting to defend its client, and like a lot of people, I think the SEC’s quiet period could use some updating. As the Wall Street Journal recently noted, the rule was fashioned more than 80 years ago, and it has seen exactly one update since then, in 2005, to include communications over websites. But the way I read the SEC’s most recent update to its rules, calling journalists and urging them to read leaked CEO letters is not permitted.

In fact, my advice to Groupon is to cool it. I appreciate the company’s frustration. But this hard sell is starting to sound desperate.