Groupon deals another blow to investors
By Supantha Mukherjee
(Reuters) - Exactly four years ago, Groupon Inc's initial public offering was priced at $20, valuing the company at $13 billion.
On Wednesday, the stock fell 30 percent to as low as $2.79, giving the operator of daily deals website groupon.com a market value of less than $2 billion.
Such has been the precipitous decline of a company that was once considered an e-commerce posterboy.
Groupon reported yet another dismal quarter on Tuesday and announced a slew of measures to turn around its business, including spending $150 million-$200 million more on a marketing blitz.
But Wall Street analysts were not convinced.
"We understand the company's investment in marketing approach but do not believe it solves the company's underlying challenge, which is building a more compelling product that virally attracts users," PiperJaffray analysts wrote in a note.
At least seven brokerages cut their price targets on the stock by as much as $5 to a low of $2.25. The median price target has nearly halved in the last three months to $4.00.
Competition has been tough for Groupon - it battles with Yelp Inc and GrubHub Inc for local dollars and with Amazon.com Inc, eBay Inc and Priceline Group Inc in its goods and travel business. Continued...