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.
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