Groupon Takes a Tumble (GRPN)

Groupon Takes a Tumble

Groupon (Nasdaq: GRPN ) stock fell 9.9% Monday to close at less than $5 per share, as analysts expressed doubts about the continued success of the e-discounter.

Groupon, the premier daily deals website, makes money by selling coupons online and then splitting the revenues from the sales with the merchants.

But marketing expenses are rising, and an analyst named Ken Sena with Evercore Partners has identified the current situation as being a case of rising “daily-deal fatigue,” putting a $3 target value on shares and putting a “sell” rating on the stock. Groupon shares have already lost three quarters of their value this year.

Last month’s earnings disappointment didn’t help the online discount site—the struggling European economy was identified as the primary reason for the miss.

More Expert Advice from The Motley Fool

The Motley Fool's chief investment officer has selected his No. 1 stock for the next year. Find out which stock in our brand-new free report: "The Motley Fool's Top Stock for 2013." I invite you to take a copy, free for a limited time. Just click here to access the report and find out the name of this under-the-radar company.

Jeff Fischer and team have demystified options. And they can rack up income like $1,030... $2,626... and $3,228 on a schedule you can set your watch by!
That's why we're glad to announce every single one of their closely guarded strategies is available to YOU during May and June – 100% FREE, no strings attached! Just enter your email address in the box below...

Fool contributor John Divine owns shares in none of the companies mentioned above. You can follow him on Twitter @divinebizkid and on Motley Fool CAPS @TMFDivine.

The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter services free for 30 days.

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment icon found on every comment.