Groupon Surprises With Better-Than-Expected Earnings
Groupon’s (Nasdaq: GRPN) had a sketchy history. A tech startup paragon in its pre-IPO days, Groupon found itself soon descending into investor disfavor over suspicious accounting practices and the tenability of its business model. Some analysts have even come to consider it a poster child for the dangers of overhyped tech stocks.
So after the long downward trend in its stock price, it came as a surprise when Groupon reported better-than-expected earnings results on Monday – and its share price ticked up about three points as a result.
Despite the surprising but minor reversal, Groupon might be a day late and a dollar short, says Peter Fader, a professor from University of Pennsylvania’s Wharton Business School:
“Groupon has clearly proven that they can’t [engage its market], and while they have been taking some baby steps in the right direction, trying to embrace the data a little bit more, trying to run it more as a business instead of as a crazy creative enterprise, I think it’s too little too late for Groupon.”
If there’s any hype still fueling the possibility of an earnings turnaround for Groupon, it may doomed to fade by the week’s end, as Facebook begins trading on the market on Friday and looks to steal the show from every other tech stock out there.