Tags: Groupon | Shares | ipo | Price

Groupon Shares Tumble Close to $20 IPO Price

Monday, 21 Nov 2011 12:41 AM

 

  Comment  |
   Contact  |
  Print  
|  A   A  
  Copy Shortlink
Groupon Inc. stock slumped as much as 14 percent on Monday on concern about increased competition, leaving shares of the largest daily deal company close to their $20 initial public offering price.

Groupon shares fell to as low as $20.03 in late morning action. The company was the third-largest decliner on the Nasdaq.

Groupon raised more than $700 million in an IPO in early November.

LivingSocial, Groupon's closest rival, announced plans on Monday to offer 20 deals with national merchants on the crucial Black Friday shopping period.

Daily deal companies often subsidize national deals, making them less profitable than offers run with local merchants. The national deals usually bring in lots of new customers, but pressure profit margins.

"In the last few days we've been hearing about LivingSocial stepping up promotions," said Edward Woo, an analyst at Wedbush Securities. "The concern is that there will be much more competition for Groupon going forward."

LivingSocial's move to offer so many national deals on Black Friday shows competition in the daily deal business will be particularly intense this holiday, he added.

"Groupon is not doing much for Back Friday, so LivingSocial may take customer attention and business away from Groupon," Woo said.

The company's shares were down $2.89, or 12.2 percent, at $20.69 in midday trading.

© 2014 Thomson/Reuters. All rights reserved.

  Comment  |
   Contact  |
  Print  
  Copy Shortlink
Around the Web

Join the Newsmax Community
Please review Community Guidelines before posting a comment.
>> Register to share your comments with the community.
>> Login if you are already a member.
blog comments powered by Disqus
 
Email:
Country
Zip Code:
Privacy: We never share your email.
 

You May Also Like
Around the Web

Most Commented

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved