Wall Street No Longer Bullish On Groupon
By Chuck Sudo in News on Aug 14, 2012 2:00PM
It looks like stock market analysts are finally in panic mode regarding Groupon. The online daily deal pioneer's stock price plummeted by nearly 20 percent Monday after the company released its second quarter reports.
On the surface, the numbers look good. Groupon’s earnings were in line with Wall Street expectations. Overall revenue was down slightly while operating income improved a bit. So why did the stock take a tumble? According to Business Insider’s Henry Blodgett, it’s because billings were down in the second quarter, compared to the first three months of 2012. You mean there’s a finite market for spa treatments, bad restaurants and teeth whitening plans? Perish the thought!
So coupon billings are down. Where Groupon can brag is in “direct revenue,” which was reported for the first time. That includes Groupon Goods, the company’s competitor to online retailers like Amazon and Overstock.com. Thanks to the direct revenue numbers, Groupon was able to report revenues of $568.3 million, which was still short of the nearly $575 million analysts projected. Groupon’s PR told Blodgett the weak dollar reduced the company’s international billings.
Still, the reduction in Groupon’s core business led to the plunge in the stock price and has analysts eyeing the stock with more scrutiny today. If there’s still a segment of the stock market that’s bullish on Groupon, it’s mutual funds. They snapped up 46.1 million shares in the company in Q2, with T. Row Price snatching 24.4 million shares.