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.

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.

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