Why Groupon Can Soar Like Priceline.com
Kevin Kuo • 66 Comments
Kevin Kuo • 66 Comments
Fri, Mar. 18, 9:15 AM
Tue, Mar. 15, 12:31 PM
- Furthering new CEO Rich Williams' efforts to better cater to small business clients (and local businesses in particular), Groupon (GRPN -7.3%) has launched a new set of tools promised to "make it easier for merchants to create and manage the perfect Groupon marketing campaign for their business across any of their devices."
- The new offerings include Web and mobile tools under the Groupon Merchant label, and a new tablet app that lets businesses track/manage campaigns, redeem Groupons, and track a campaign's performance. Groupon is also offering new discount and promo options for its self-serve Deal Builder service.
- The company notes over 90% of its merchants have 20 or less employees, and that 1/3 are sole proprietors. Shares are down sharply on a day many volatile tech names are seeing selling pressure.
- Last November: Groupon CEO argues company is misunderstood, remains dominant in local deals
Wed, Mar. 9, 9:37 AM
- "While Groupon (GRPN -9.6%) has recently shown signs of progress in its transformation to an eCommerce marketplace and its core initiatives (including streamlining its international operations or customer acquisition), we believe there is still a long road ahead in strengthening the company's positioning in the local ad and/or local eCommerce market," writes UBS' Eric Sheridan. "Meanwhile, larger Internet companies, predominantly Google and Facebook, are increasing their efforts to capture local ad dollars while Amazon's same-day delivery service reduces the benefit of a local marketplace,"
- Sheridan, who has downgraded to Sell and set a $3.20 target, also highlights several perceived "key weaknesses" in Groupon's competitive position: "a) marketing spend will pressure near-term margins; b) increased competition in Goods; c) mix shift to lower margin 1P business; and d) slowing customer and engagement growth." He blames the issues on Groupon's international retrenchment and a "lack of operating profit scale to drive additional investments in innovation that might counter-act the platform strength of Google and Facebook."
- Sheridan has also downgraded Yelp today. With the help of an Alibaba stake disclosure, Groupon remains up 88% since posting a Q4 beat on Feb. 11.
Wed, Mar. 9, 9:15 AM
- Gainers: LINE +27%. ATSG +24%. REXX +21%. DNR +19%. CRC +17%. BUFF +14%. LNCO +14%. BIOC +14%. SXE +14%. CJES +14%. SGY +14%. BETR +11%. AMRN +10%. BTE +9%. DANG +9%. BCEI +8%. GGB +7%. WLL +7%. SDLP +7%. EXPR +7%. CLF 6%. PBR 6%. CHK 6%. PBR.A 5%.
- Losers: SDRL -13%. DSX -9%. BPT -9%. GRPN -5%. PLNT -5%. YELP -5%.
Thu, Mar. 3, 3:42 AM
- IBM has filed a lawsuit against Groupon (NASDAQ:GRPN), alleging that the daily deals website operator builds its business model using patents without authorization.
- "Groupon has refused to engage in any meaningful discussions about reaching a license agreement to end its infringement of IBM's patents," the firm's complaint said.
- Big Blue filed a similar lawsuit against Priceline last year, accusing it of patent infringement in running its travel and dining websites.
Fri, Feb. 26, 9:17 AM
- Gainers: RRM +49%. SUNE +31%. AMTG +31%. SGMS +27%. STMP +26%. GOL +19%. SPLK +17%. JCP +16%. HLF +13%. BIDU +11%. SYN +10%. GLBL +8%. WLL +9%. FCX +7%. CHK +7%. PANW +8%. NRF +6%. TCK +6%. MRO +6%. KHC +6%. GRPN 5%. HLT 5%.
- Losers: RJET -83%. PPHM -60%. CARA -36%. WTW -28%. SWN -14%. GG -11%. FOLD -9%. RBS -8%. MNKD -6%. ARI -5%.
Mon, Feb. 22, 9:19 AM
Mon, Feb. 22, 8:07 AM
Tue, Feb. 16, 1:33 PM
- Groupon (GRPN +38.9%) is now up 79% since Thursday afternoon's Q4 beat. Today's big gains come after Alibaba disclosed a 5.6% stake in the daily deals leader.
- Groupon spokesman Bill Roberts tells Bloomberg his company was unaware Alibaba had taken a stake prior to Alibaba's 13G filing. "Alibaba has a reputation as a long-term holder, and we’re pleased that they take the same view of Groupon’s opportunity and execution as we do."
- Short-covering is likely helping out today: 78.7M shares (26% of the float) were shorted as of Jan. 29.
Tue, Feb. 16, 12:46 PM
Tue, Feb. 16, 9:13 AM| Tue, Feb. 16, 9:13 AM | 1 Comment
Mon, Feb. 15, 2:14 PM
- Chinese e-commerce giant Alibaba (NYSE:BABA) owned 33M shares of U.S. local online deals leader Groupon (NASDAQ:GRPN) as of the end of Q4, according to a 13F filing. Stakes in Chinese chat app developer Momo and Chinese microblogging leader Weibo (already known) were also disclosed. The Groupon stake has a current value of $95M.
- The disclosure arrives shortly after Groupon rose 29% on Friday following a sizable Q4 beat and 2016 adjusted EBITDA guidance hike fueled by improving North American billings, and three months after the company saw a CEO change. Shares remain down 65% from the end of 2014.
- While the disclosure has fueled speculation Alibaba could try to acquire Groupon, it should be noted the company has taken stakes in many American firms without fully acquiring them. Examples include online retailer Jet.com and flash deals site Zulily; the latter was acquired by QVC.
- Over in China, Alibaba and Alipay parent Ant Financial have gone after the country's hotly competitive local deals/online services market through their Koubei JV. Last month, Alibaba disclosed Koubei produced a calendar Q4 GMV of $2.4B.
Fri, Feb. 12, 5:40 PM
Fri, Feb. 12, 12:48 PM
Fri, Feb. 12, 9:17 AM
Thu, Feb. 11, 7:23 PM
- Having gone into earnings just $0.09 above a 52-week low of $2.15, Groupon (NASDAQ:GRPN) has jumped to $2.63 after handily beating Q4 estimates, hiking its 2016 adjusted EBITDA guidance, and reiterating its 2016 revenue guidance.
- Boosting Q4 EPS: $112.5M was spent to buy back 35.5M shares. $192.9M was spent on buybacks in Q3.
- Billings: Gross billings fell 1% Y/Y in Q4 to $1.71B (+4% exc. forex), after having dropped 2% in Q3. With revenue rising 3.8% excluding the impact of the TMON divestiture, take rate rose. North American billings remained strong, rising 10.7% Y/Y to $1.05B. EMEA billings -13.1% to $487.1M; Rest of World -21.4% to $169.5M.
- Segment performance/metrics: Local (daily deals) billings -4% Y/Y to $812M; revenue -6% to $279.7M. Goods (e-commerce) billings +4% to $720.4M; revenue +10% to $602.3M. Travel billings -6% to $174.6M; revenue -10% to $35.2M.
- Metrics: Units sold were roughly flat Y/Y at 62M. Active customers rose by 0.3M Q/Q and 1.5M Y/Y to 48.9M. Trailing 12 month customer spend fell by $2 Q/Q and $7 Y/Y to $130.
- Financials: With a mix shift towards Goods weighing, GAAP gross profit fell 2% Y/Y in spite of 4% revenue growth. Operating expenses rose 9% Y/Y to $377.2M, thanks to $5.4M in restructuring charges and a a 39% increase in marketing spend to $83.2M. 2015 free cash flow was $208.1M, up from $168.9M in 2014. Groupon ended 2015 with $853.4M in cash and no debt.
- CEO Rich Williams, three months removed from taking over the top job: "Following a stronger than expected fourth quarter, we enter 2016 with a continued focus on streamlining our global operations, reducing our reliance on low margin products in our shopping business and rekindling our customer acquisition efforts to set the stage for accelerated growth."
- Groupon's results/guidance, earnings release, slides (.pdf)
Groupon, Inc. is a local commerce marketplace that connects merchants to consumers by offering goods and services at a discount. The company operates through three segments: North America, EMEA, which is comprised of Europe, Middle East and Africa, and the remainder of the Company's... More
Industry: Internet Information Providers
Country: United States
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