Why Groupon Shares Bounced Back

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of Groupon (NASDAQ: GRPN  ) rebounded 15% from yesterday's earnings-related beating after the embattled online deals company fired its quirky founder and CEO, Andrew Mason.

So what: The shares have been pummeled over the past two years as controversial metrics, declining revenue growth, and slowing consumer interest have all brought the company's long-term viability into question, so the change naturally serves as a much-needed catalyst for a turnaround. But while a new CEO may bring a more focused approach to the table, the intensifying competitive and secular headwinds that Groupon faces might be too powerful for anyone to handle.

Now what: Groupon said that it has started an official search for a permanent CEO, with Co-founder/Chairman Eric Lefkofsky and Vice Chairman Ted Leonsis serving as interim co-CEOs in the meantime. "This leadership change gives you some breathing room to break bad habits and deliver sustainable customer happiness -- don't waste the opportunity," wrote Mason in a refreshingly candid letter to his employees. Given the tremendous uncertainty that still surrounds Groupon's business model, however, buying into that opportunity doesn't seem prudent at this point.

Interested in more info Groupon? Add it to your watchlist.

Company shares have fallen dramatically over the past year and left investors panicked. Will Groupon live out its American Dream, or leave shareholders empty-handed? In order to answer that question, our analyst has compiled a premium research report with in-depth analysis on whether you should buy or sell Groupon right now, and why. Simply click here now to get started.


Read/Post Comments (0) | Recommend This Article (0)

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 Report this Comment icon found on every comment.

Be the first one to comment on this article.

DocumentId: 2450547, ~/Articles/ArticleHandler.aspx, 7/24/2014 5:03:01 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

TREND TRACKER: Get Rich When the Web Goes Dark

It's time to say "goodbye" to your Internet! One bleeding-edge technology is about to put the World Wide Web to bed. And if you act right away, it could make you wildly rich. Experts are calling it the single largest business opportunity in the history of capitalism… The Economist is calling it "transformative"... but you'll probably just call it "how I made my millions." Big money is already on the move. Don't be too late to the party – find out the 1 stock to own when the Web goes dark.


Advertisement