What’s the difference between economizing and greed? I’m not sure but it all becomes a tangled mess at Groupon. Groupon is a clearinghouse for buying group deals on the internet. Economizing individuals have saved plenty with these products but I don’t think anyone would call these people greedy. Groupon on the other hand was up to some shenanigans as it tried to elevate its stock price before its initial public offering on the stock market. In its paperwork it provided the SEC, it claimed it made twice as much profit as it actually earned. These inflated, but made up profits helped elevate what its stock would sell for on the NYSE.
These numbers were discovered to be wrong and new figures were submitted to securities regulators. I don’t know who or if anyone went to jail over this, but if I tried to sell a fake Rolex as these CFO’s did, I would certainly be charged. And convicted.
Curiously, as this relates to my previous thoughts on the corporate greed backlash, it’s hard for me to imagine who this could have affected besides wealthy investors who didn’t do their due diligence. Of course actions such as these are a breach of contract and that serves no one.
The big winners out of this will be Groupon’s competitors such as Living Social, Amazon.com and Google. But this advantage to competitors brings up a central problem for the Occupy movement. Competition. If a corporation was truly greedy and had massive profits, wouldn’t a competitor do well to take less profit and price them right out of the market? Every small business owner understands this logic yet such a basic observation seems to escape a movement incapable of asking itself such simple questions.