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Update: Fear Creates Value Buying In Groupon

|Includes:Groupon, Inc. (GRPN)

Yes I am expecting a reversal.

Groupon (NASDAQ:GRPN) should reverse early Thursday morning and close higher on the day. Let me explain…

Fundamentally and forward looking, Groupon is extremely cheap at $9.25 to $9.50. The insider selling that some think created the recent sell-off actually transpired between the 11th through 18th of Nov. at an average price of $10 and change. After the insider selling ended on the 18th, news reached the market on the 19th announcing insiders were taking profits - not a wholesale sell-off.

Upon hearing the news, traders reacted in unwarranted fear and decided to sell because that's how they are conditioned to behave whenever any insider sells. For no reason other than "FEAR" did the stock price decline. It can't be insider selling driving it lower because the market already digested the move 3 - 8 days ago. The only thing selling now is "FEAR" which is mistake. I believe on Thursday morning, "FEAR" will be replaced with "VALUE" as investors realize their mistake and common sense causes a buying spree for the overly discounted shares of Groupon.

Take a moment and read this article I wrote on Groupon and why I believe $15 is a realistic target.

'BUY' Ratings Mark Groupon As Undervalued (Price Targets Up To $16)

Disclosure: I am long GRPN.

Stocks: GRPN