Sunday, November 11, 2012

Groupon Inc (NASDAQ:GRPN) Witnessed Blood Bath Selling Post Earnings

Online daily deals site Groupon failed to enthuse investors with its third quarter results with revenues missing expectations.

The company reported a net loss of $3 million and broke even on a per-share basis, compared to a net loss of $54.2 million and a loss of 18 cents per share in the year-earlier period.

This loss included stock-based compensation and acquisition-related expenses of $25.1 million.

Should Investors Buy GRPN After Today’s fall? Let’s Find Out Here

Excluding these charges, Groupon said its earnings were 3 cents a share. Revenue rose 32 percent to $568.6 million from $430.2 million in the year-ago quarter.

Analysts had forecast earnings at 3 cents a share and revenues at $590 million.

Groupon, which offers daily discounted deals online on spas and restaurant services, has estimated current quarter's revenues at $625 million to $675 million.

On Thursday the company's shares spiralled down more than 16 percent to $3.29 a share taking its total depreciation to about 80 percent since its debut in November last year.

A day later the company's shares had fallen about 30 percent to a record low of $2.76 each.

Once a darling of investors and a poster-boy for the second generation Internet companies, it is now being shunned by investors who have raised questions about the business model, while the Eurozone debt crisis has been blamed for denting consumer demand for some of Groupon's deal.

Groupon offers coupons to its subscribers, which give them discount deals that are available that day only on anything from restaurant meals to spa treatments.

Adding to the difficulties, the US Securities and Exchange Commission has been looking into Groupon's accounting and disclosures to the stock market.

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