Shares of Groupon Inc(NASDAQ:GRPN) jumped another 15% in Wednesday’s session adding to prior session gain of 9% after a hedge fund declared that it purchased 9.9% stake in the decrepit online deals company.
Tiger Global Investments LP revealed its purchase of 65 million stocks in a securities filing on Monday. It also is the owner of a small stake in Facebook Inc.
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Groupon Inc has championed the online daily deals industry, offering steep discounts to its subscribers on everything from spa sessions to restaurants to toe fungus treatment procedures. In order to expand its business and in an effort to stand apart from the copycat online deals website, Groupon has attempted to establish itself as a local e-commerce company. Presently, it also sells electronic devices and other items. However, its revenue growth rate has gone down sharply since the company had gone public previous year.
That has taken a toll on its shares.
The purchase by Tiger Global is an indication that at least one reputed shareholder has confidence in the company.
Ross Sandler, an analyst at Deutsche Bank has said in a note to shareholders on Monday before Tiger Global revealed its stake that he is gearing up for a probable update of Groupon’s stock that he currently rates ‘Hold’. He said that the notion that everything is imploding at Groupon is not right.
The company’s North American business is comparatively stable quarter over quarter, even though growth has slackened from a year back. Sandler said that the company’s business in Europe, Still is several quarters from stabilization and has significant problems.
The company based in Chicago, Groupon’s stock has risen over 25% in the past two trading sessions. Groupon had gone public at $20 on 4th November, 2011. It has varied from $2.60 to $25.84 ever since. However, it has not traded less than $10 since the month of July.