Following a dismal earnings projection, Groupon announced that it has replaced co-founder Andrew Mason as the company’s chief executive officer.
Executive chairman and Mason’s co-founder Eric Lefkofsky and vice chairman Ted Leonsis will serve as co-CEOs while Groupon searches for a new top executive. (Leonsis is the majority owner of the Washington Capitals, Wizards and Mystics sports teams.)
Groupon did not say what Mason’s next move will be, but thanked him for his time with the company in a Thursday release.
“On behalf of the entire Groupon Board, I want to thank Andrew for his leadership, his creativity and his deep loyalty to Groupon. As a founder, Andrew helped invent the daily deals space, leading Groupon to become one of the fastest growing companies in history,” said Lefkofsky in a press release after the markets closed.
Many had expected Mason’s ouster after Groupon missed analyst expectations for its earnings and saw its stock fall over 24 percent to $4.35 a share on Thursday. After the announcement of the leadership change, the company’s shares were up over 5 percent to $4.79.
Mason publicly posted his farewell letter to his employees, holding himself accountable for the company’s performance.
Wrote Mason: “After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding – I was fired today. If you’re wondering why… you haven’t been paying attention.”
He said new leadership gives the company and its employees a “second chance.”
Mason founded Groupon, the first daily deals site to catch mainstream interest, with seed money provided by Lefkofsky. The company went public in November 2011 and was originally priced at $20 per share.
The company has struggled to maintain its early success, both in the face of competition from other daily deals sites such as the Washington, D.C.-based LivingSocial, and as consumer interest in daily deals looks to have waned.
Groupon reported Thursday that it projected revenue in the range of $560 million to $610 million, lower than analyst projections of $650 million in sales for the quarter.
Below is the full text of Mason’s statement:
(This is for Groupon employees, but I’m posting it publicly since it will leak anyway)
People of Groupon,
After four and a half intense and wonderful years as CEO of Groupon, I’ve decided that I’d like to spend more time with my family. Just kidding - I was fired today. If you’re wondering why... you haven’t been paying attention. From controversial metrics in our S1 to our material weakness to two quarters of missing our own expectations and a stock price that’s hovering around one quarter of our listing price, the events of the last year and a half speak for themselves. As CEO, I am accountable.
You are doing amazing things at Groupon, and you deserve the outside world to give you a second chance. I’m getting in the way of that. A fresh CEO earns you that chance. The board is aligned behind the strategy we’ve shared over the last few months, and I’ve never seen you working together more effectively as a global company - it’s time to give Groupon a relief valve from the public noise.
For those who are concerned about me, please don’t be - I love Groupon, and I’m terribly proud of what we’ve created. I’m OK with having failed at this part of the journey. If Groupon was Battletoads, it would be like I made it all the way to the Terra Tubes without dying on my first ever play through. I am so lucky to have had the opportunity to take the company this far with all of you. I’ll now take some time to decompress (FYI I’m looking for a good fat camp to lose my Groupon 40, if anyone has a suggestion), and then maybe I’ll figure out how to channel this experience into something productive.
If there’s one piece of wisdom that this simple pilgrim would like to impart upon you: have the courage to start with the customer. My biggest regrets are the moments that I let a lack of data override my intuition on what’s best for our customers. This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness - don’t waste the opportunity!
I will miss you terribly.
(LivingSocial chief executive officer Tim O’Shaughnessy is the son-in-law of Washington Post Co. chairman and chief executive Donald E. Graham.)
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