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R.J. Chopin
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RJ Chopin is an Equities Strategist and veteran trader/investor with over 17 years experience. RJ entered the stock market during late 90’s as a day-trader. After 3 years of high frequency day-trading, RJ began developing “Advanced Trading Concepts,” a proprietary step-by-step trading system... More
  • Coupons.com Missing Article Explanation Of Over Valuation. 1 comment
    Mar 7, 2014 1:05 PM | about stocks: COUP, GRPN

    On Thursday Seeking Alpha accepted my article for publication "Should You Avoid Coupons.com's IPO And Buy Undervalued Groupon Instead?"

    Unfortunately, it was taken down for editorial review. The problem with the article is that it links to form S-1/A that was filed with the SEC on February 14, 2014. On February 25, 2014 the company amended that form and reported a 2.5 for 1 reverse split, reducing the outstanding shares. In effect, my article challenged the valuation of 11 to 17 times gross revenues (sales) of $167,892,000, which was based on the IPO price of $12 to $14 and the pre split shares.

    Coupons.com's 11th hour reverse split, reported on February 25, 2014 to the SEC on form S-1/A changed the valuation making my previous research appear incorrect. But as you can see today, March 7, 2014, shares of the company priced at $16, were bid up to $27, and now are trading at $32.40 per share. By my calculations today, shares are now valued around 13 to 14 times gross revenues (excluding the other shares to hit the market later) making the company clearly overvalued.

    CONCLUSION

    Shares are extremely overvalued at $32.40 just as I stated in the article. The reverse split 2.5 for 1 share basically holds the same pre split overvalued price of about 13 to 14 times gross revenues. Coupons.com has a 2.3 billion to 2.4 billion market cap or 13 to 14 times gross revenues -- overvalued.

    The 11th hour reverse split, 2.5 for 1, has caused the stock price to go from the first estimates of $10 to $12, then $12 to $14, then $16 and now $32.40 succeeding in creating an overvalued stock at 14 times gross revenues and validating my original valuation.

    By comparison, Groupon is undervalued at 2.3 times gross revenues, making Groupon the wise choice.

    I tried to inform everyone as to what was going down, but...

    I leave you with this question. Why did the company pull a 11th hour reverse split?

    Source document

    www.sec.gov/cgi-bin/browse-edgar?company...

    Disclosure: I am long GRPN.

    Stocks: COUP, GRPN
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Comments (1)
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  • john alpha
    , contributor
    Comment (1) | Send Message
     
    sour grapes on your call but CONGRATS for bringing to light a goldman sachs scheme to not tell holders of at 2.5-1 rev splits as well as leaving it blank in the S-1 filing..........
    7 Mar, 06:00 PM Reply Like
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  • $SALE continues to soar. $COUP should follow after brief pause. I would not be caught short ahead of earnings.
    1 day ago
  • $SALE soaring ahead of earnings and $COUP soon to follow. GRPN up 1.3%.
    3 days ago
  • Yes, we are pounding the table on $SALE, $COUP and $GRPN as STRONG BUYS going into the holidays. 52 week lows are not justifiable.
    Oct 7, 2014
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