Groupon stock slides despite quarterly profit

August 14, 2012
Online shopping deals giant Groupon on Monday posted a sound quarterly profit but saw its stock tumble nearly 20 percent due to a disappointing forecast for the months ahead.

Online shopping deals giant Groupon posted a sound quarterly profit but saw its stock tumble nearly 20 percent due to a disappointing forecast for the months ahead.

The Chicago-based firm reported a of $28.38 million on revenue that climbed 45 percent to $568.3 million in the quarter ended June 30.

"We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure," said chief executive Andrew Mason.

"We've deepened our relationships with a growing base of merchants and customers worldwide."

However, investors were unhappy with revenue that was less than analysts expected and a scaled back forecast for the current quarter.

Groupon shares fell more than 20 percent to a new low but regained some ground, down 19.74 percent to $6.06 in after-market trading on the Nasdaq.

The company made its stock market debut at $20 per share in November and peaked above $31 dollars a share.

In February Groupon issued its first as a publicly traded company, saying it failed to turn a profit despite revenue nearly tripling from a year earlier.

Groupon shares were listed on the on November 4 in a blockbuster public offering that raised a whopping $700 million and triggered fears that investors may be foolishly overvaluing hot Internet startups.

Groupon, which rejected a $6 billion takeover offer from a year ago, has enjoyed phenomenal growth since its founding in 2008 but has been dogged by questions about its business model and accounting methods.

Groupon makes its money by selling members deals for discounts on activities, items, or services and then splitting the money with the businesses involved.

Revenue in North America was 66 percent higher than in the same quarter a year earlier, but Groupon took in more than half its revenue outside the United States where exchange rates worked against the Chicago company.

Groupon reported having 38 million active customers more than 100,000 merchant partners at the end of the quarter.

Explore further: Top Groupon exec jumps back to Google

Related Stories

Top Groupon exec jumps back to Google

September 24, 2011

Groupon revealed that the startup's chief operating officer was leaving after just five months for a job at her former employer -- Google.

Groupon shares soar after $700 million IPO

November 4, 2011

Groupon shares soared on Wall Street on Friday after the online daily deals sensation raised $700 million in the biggest initial public offering by an Internet company since Google.

Groupon distancing itself from rivals: CEO

December 1, 2011

Groupon chief executive Andrew Mason said Wednesday in his first comments since the online daily deals site went public that he believes the company is distancing itself from its rivals.

Groupon fails to turn profit as revenue grows

February 8, 2012

Daily deals site Groupon on Wednesday issued its first earnings report as a publicly traded company, saying it failed to turn a profit despite revenue nearly tripling from a year earlier.

Recommended for you

Magnetic fields provide a new way to communicate wirelessly

September 1, 2015

Electrical engineers at the University of California, San Diego demonstrated a new wireless communication technique that works by sending magnetic signals through the human body. The new technology could offer a lower power ...

0 comments

Please sign in to add a comment. Registration is free, and takes less than a minute. Read more

Click here to reset your password.
Sign in to get notified via email when new comments are made.