Groupon Stock Sinks After 4Q Financial Report Released
By Chuck Sudo in News on Feb 9, 2012 10:15PM
Image Credit: Seth Anderson
The stock market is a fickle beast. This was proven again today as Groupon stock tumbled nearly 14 percent today after the daily deal company posted a loss in the fourth quarter, its first financial report as a publicly traded company.
The stock decline started almost immediately after Groupon announced a $42.7 million loss in the fourth quarter yesterday. This despite posting increased revenues of $506.5 million during the same time period. That's a 194 percent increase over the same time period in 2010.
Groupon CEO Andrew Mason opted to accentuate the positives.
Groupon had a strong fourth quarter and we finished 2011 having helped 250,000 local merchants across 47 countries grow their businesses while saving Groupon customers billions of dollars. We will continue to invest in new services and tools that help our merchant partners be more successful and drive local commerce around the world.
It's the investing in "new services and tools that help our merchant partners be more successful and drive local commerce around the world," i.e. buying out other companies, that may have some stock analysts wary about the continued health of Groupon.
Or it's possible that Groupon customers who resisted the urge to buy a Shake Weight as an impulse buy at a Walgreen's weren't enticed to buy it when it was half off retail through Groupon Goods. Analyst Sameet Sinha of B. Riley & Co. told Crain's what should concern Groupon is the number of active customers. Sinha said the numbers indicate "not enough people are buying Groupons."
We wanted to read NBC Chicago Groupon cheerleader David Wolinsky's thoughts on the reports, but he wrote an article full of rhetorical questions he answered himself.
There are some glimmers of optimism from Groupon's financials. They narrowed their overall losses between 2010 and 2011 while quadrupling revenues to $1.6 billion. Mason also said the company was making efforts to streamline its spending, especially their outlandish marketing expenses
Groupon stock, by the way, closed at $21.17, still above its initial offering of $20 a share.