“Groupon Inc. is showing the risks of a young company shifting its business model — pivoting, to use techdom’s 2012 buzz word — and investors don’t like it.” As of around 11:15 a.m. EDT on Friday, GRPN is trading at $2.78, down 29.2 percent for the day and down 86.1 percent from its $20 IPO price, as the company suffers the consequences of its disappointing third-quarter earnings report. CEO Andrew Mason attempted to make the case that Groupon can succeed by shifting toward selling discounted goods and services, along with its deals. But merchandise has margins that are a fraction of those achieved with daily deals. It seems like Groupon has expanded too quickly for its own good, and as a result its suffering “execution issues” abroad. Also, the number of “active customers,” or those who have purchased a deal in the past 12 months, has plummeted. And as if all this weren’t bad enough, Mail.Ru, a Russian email-to-social networking group, cut its stake in Groupon from 4.12 percent of shares to 0.84 percent of shares. Salt, meet wound. (Crain’s Chicago Business, WSJ.com, Chicago Tribune)
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