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Why Groupon, United Online, and Financial Engines Tumbled Today

Dan Caplinger
February 21, 2014

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

The stock market didn't make very big moves on Friday, with initial modest gains giving way to modest losses as the Dow and S&P 500 posted declines of about 0.2% each. But for Groupon (NASDAQ: GRPN), United Online (NASDAQ: UNTD), and Financial Engines (NASDAQ: FNGN), there was nothing calm about Friday's trade, as all three stocks posted substantial losses.

Groupon plunged 22% as the daily deals turned online retailer reported its fourth-quarter results, including discussion of how costs of acquisitions related to its attempt to recast itself could hurt its bottom line for an extended period of time. With its online-coupon business deteriorating, Groupon has emphasized sales of actual physical goods as having greater potential for growth. Yet, even though Groupon's holiday-quarter results included revenue growth of 20% and adjusted net income that was better than many investors had expected, the company also projected weaker guidance for the current quarter. That left s