By now, most investors have seen the news that Groupon is starting its investor road show and getting its IPO off the ground. To be sure, Groupon has become a poster child for what not to do during an SEC quiet period; whether it's the company's CEO drafting a memo for the world to see, its chairman talking about the company at an awards dinner, or random employees posting information on social media networks, no one seems to get the hint that the rules about quiet periods are there for particular reasons.
What's more, the more times a company opens its collective trap, the more muck it gets in its mouth. We have seen the company make two separate announcements about top-level people (Margo Georgiadis and Brad Williams) coming and going within six months. We have seen news about investment bankers worrying about the overall valuation. Is it me, or does "10-K" represent the number of times that Groupon's attorneys have had to file paperwork?
Still, it's not all that bad. In fact, I would venture to say that things are going to come up roses for Groupon -- and investors -- if they play their cards right. I look at this giant game of "Press Your Luck" and realize that Groupon has a lot of spins left even though it has hit the Whammy as of late.
What's more, there's a greater learning about valuation and positioning here. If I were counseling Groupon, I would tell the executive team what I would tell any others in the same position:
You can still talk during a quiet period, but you have to talk about different things than just you.
In my world, I refer to it as being quiet but staying vocal. It's the principle of talking about the influencers that touch your business, either directly or indirectly, and putting the onus on them to respond instead of you doing all of the talking.
Groupon's executive team has had a hard time understanding this, so I am going to give them a couple pieces of advice on what it can say before the official IPO begins.
Talk about the growth of the industry and competition as a good thing. Groupon would be smart to reference its competition in a way that grows the entire sector. LivingSocial, WeDeal, and a host of other entries do things that Groupon doesn't. They can all learn from each other, just as they have learned what they don't like about Groupon.
Convene members of the marketing and retail community for roundtable discussions on the state of retail. Opening the door for others to tell a company what the entire industry can do differently, and form actionable steps to make change happen, can go a long way to help bolster a company's reputation. In this case, Groupon doesn't need to say word one about its financial position. Rather, it can position itself as a clearinghouse of information and as a repository of resources.
"Should our IPO happen, Groupon will be nice and not naughty." This isn't mere PR speak and a blanket statement, but a reference to the calendar. Anyone else notice that it is starting to feel like winter outside? Anyone see the calendar changing toward the holiday shopping season, when people are more likely to get into a holiday shopping mood? This works out well for Groupon, as the investment community will have its eyes on the world of retail to make sure that the retail sales estimates that the National Retail Federation and others are making hit their targets. Groupon has proven it can help retailers get more traffic. The holiday season is when retailers get more traffic. Anyone else see the correlation here?
Let's face the facts here: for all of the naysayers who think Groupon is shooting itself in the foot, we have to remember that current estimates of a $12 billion IPO exceed what Google offered it. People within the company are still going to be "wildly profitable" when this is all over. And let's not forget that the economy took a little turn for the worse as well. There are things that are out of control of us and the company.
But when you start talking about the right things to the right people, things can start to go your way. Let's hope Groupon has some meaningful conversations within the next few weeks.