Despite all the visionary talk from young dot-com CEOs, the golden rule still applies on Wall Street: That is, the person who has the gold makes the rules. This certainly has been illustrated by the Groupon offering.
Until a few weeks ago, Groupon’s CEO Andrew Mason was a wacky character. He liked to make funny facial gestures and crack jokes while giving interviews. He turned down a $6 billion offer from Google (NASDAQ:GOOG) last year. Even in the original filing for Groupon’s IPO, Mason included a funky letter to prospective shareholders. In it, he talked about empowering the “little guy” and how his company was “unusual.” The most interesting line: “Life is too short to be a boring company.”
My, how things have bored down for Groupon.
For example, the once-unhinged Mason now is wearing a suit and tie while putting together a fairly corporate-friendly presentation on his IPO road show.
And now Mason is saying the kinds of things that jazz up investors, like Groupon’s apparent new policy to fire the 10% worst-performing salespeople — each year. This could come to nearly 500 pink slips annually and certainly would motivate the remaining 90%.
The idea isn’t exactly new — this was something General Electric’s (NYSE:GE) former CEO, Jack Welch, implemented to save the company from implosion during the 1980s. Of course, Enron also used the 10% game plan.
But on the other side of the dot-com bubble is Zynga, which also is expected to go public in November. This company’s brash approach has not been diminished.
A sure sign is Zynga’s new headquarters, which looks like a high-tech amusement park. At the entrance, you’ll see a Winnebago. And as you wander about, you’ll find numerous massage chairs and other way-cool expensive furniture, as well as cafes well-stocked with sushi. (Let the Occupy Wall Street folks eat cake!)
A few weeks ago, Zynga’s CEO Mark Pincus launched 10 new games at the offices, which were packed with reporters — the scene was more reminiscent of a Hollywood film, not a business product launch.
True, this stuff is really over the top. But then again, Zynga is being authentic to its culture. The company understands this is important, especially when trailblazing a new market.
As for Groupon — it seems it will do whatever it needs to kowtow to Wall Street’s whims.
Tom Taulli runs the InvestorPlace blog “IPO Playbook,” a site dedicated to the hottest news and rumors about initial public offerings. He is also the author of “All About Short Selling” and “All About Commodities.” Follow him on Twitter at @ttaulli. As of this writing, he did not own a position in any of the aforementioned stocks.