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A report today from Benchmark Co. gives Groupon Inc. (NASDAQ:GRPN) a price target of $20. That’s the same price that the firm’s IPO was set at. The firm’s stock opened today at $9 and is now trading up over 7% at 9.60. That is a serious rise to expect from the company.

The analysts, Clayton F. Moran and Daniel L. Kurnos, suggests that the end of the firm’s IPO lock up will be a driver for future success. 93% of the shares were held in lock up until last Friday. The firm’s founders have pledged to keep their 33% of the company and an additional 20% is held back by Rule 144 restrictions.

On top of the end of the lock up the report suggests the company’s business will perform well in the coming years as it moves from consumer acquisition to consumer activation. That and the originality in hitting the local bricks and mortar market with online deals will be the drivers behind revenue growth according to the analyst.

Groupon has some strengths but they are counter weighted by weaknesses that will keep the stock price depressed for some time. Despite global leadership in their field the company still has a business model that is essentially repeatable.

The firm already has several competitors doing the same thing they are. If somebody comes along and does it slightly better, for example interfacing with merchants more successfully, there will be a serious battle in the sector. Groupon has nothing that nobody can’t do. That is one of its essential problems.

Another is mentioned in the report’s risk section. Groupon relies on customers seeing a deal that pops out of them in their email inbox. Most customers will not read every Groupon email if they ever read any. The subject line has to jump out at a customer or the deal is ignored. As the numbers of these online deal offering companies increases users will be more likely to scan and less likely to engage.

Under the “Accounting Inaccuracies” segment of the risk report there appears just one sentence rather than the full page awareness and analysis that might be expected when dealing with a company like Groupon. The sentence in the report reads “Groupon had to revise its first public quarter of financial results. Its auditor found “material weakness” in Groupon’s internal controls.”

The company has been the subject of inquiries into its finances even before it went public. During its filing the company had “accounting errors” that eventually had to be settled with the SEC. Before its great Q1 earnings report the company saw a surge in trading volume that led to an investigation. These are just examples.

This report seems to have some amnesia bout the firm’s poor financial practice in the past. That doesn’t reflect well on the target price set by the analysts.

Groupon Inc. may have a world leading position in its market but it remains vulnerable to competition. It continues to be dogged by accusations of financial dealings outside of the legal sphere. Both of these should occur to investors before investing in the hope the firm will hit $20.