I hope no one forgets we often value companies (in an overly simplified way) by a multiple of their revenue. Of course other things are taken into consideration but had they kept their discount as a marketing expense they could have gotten away with it in going on to next steps like a potential IPO. What the article highlights is that the wrong variables were taken into account when calculating margin, and this could happen very easily/could be debated both ways.

The thing I'm curious about is their balance sheet. If someone buys from a site like plum district a gift certificate for $40 that they paid $20 for, California residents are entitled to at least $20 of goods for an unlimited time... What a nightmare!