Groupon's founder and chief executive, Andrew Mason, has been fired following a string of poor financial results.
In a candid memo to Groupon's staff Mason said: "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."
The company temporarily has two new co-CEOs while a permanent replacement is sought. Executive chairman Eric Lefkofsky and vice chairman Ted Leonsis will share the leadership role.
The announcement of Mason's departure followed the publication yesterday of a fourth-quarter earnings report in which the company posted a loss of 12 cents per share, causing a drop in its share price of more than 20 per cent. However, following the news of Mason's departure stocks rose by 12 per cent in after-hours trading on Wall Street.
Groupon offers bulk discounted gift certificates. Founded in 2008, and floated on Nasdaq at the end of 2011 at a valuation of $17bn, the firm's shares have since lost 77 per cent of their value. Groupon is now valued at about $3bn.
Many analysts believe that Groupon's business model is unsustainable and that its potential was hugely exaggerated at the time of the IPO.
"We have little confidence in Groupon's ability to attack 48 countries and 500 markets simultaneously and profitably," said Jordan Rohan, analyst for investment bank Stifel Nicolaus.
"To be clear, we believe Groupon has a strong core following in some markets, for some types of merchants and for some consumers... but the dream of becoming the operating system for local commerce, is, well, just a dream."