Groupon Inc (GRPN) Shares Deflate On Latest Analyst Report

Groupon earningsBy GrouponRUS (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Groupon Inc (NASDAQ:GRPN) shares fell significantly this morning after last week’s false reports were revealed. The stock fell as much as 9 percent in late morning trades, before making a slight rebound.

Groupon Inc (GRPN) Shares Deflate On Latest Analyst Report

On Friday, Groupon Inc (NASDAQ:GRPN)  shares increased more than 23 percent after Bloomberg speculated that Groupon may be acquired by Google. Groupon’s stock has fallen 80 percent since the company’s IPO a little more than a year ago. Apparently, Google Inc (NASDAQ:GOOG) did make an offer to purchase the daily deal giant before the company went public.

Evercore Partners Inc. (NYSE:EVR) released a report this morning saying that it didn’t find any basis for the rumors that inflated Groupon’s stock on Friday. In fact, they said that they believe Google Inc (NASDAQ:GOOG) and other companies that may have wished to acquire Groupon in the past believe in the “network effect,” which would mean it’s unlikely that Google (or any other company) has expressed renewed interest in purchasing Groupon because of the erosion of the daily deal industry.

The firm did find other reasons Groupon’s stock may have increased so significantly. Evercore is keeping Groupon on its Conviction Sell list and continues to rate the stock as Underweight. Analysts at Evercore say they see an “absence of competitive barriers and a highly competitive retailing environment.” However, they do say that their Underweight rating is based on a process that could take several years to fully develop.

They expect Groupon Inc (NASDAQ:GRPN) to make positive strides with the experience of users on its retail site and build a “more ‘sticky’ user experience.” They say because shares of Groupon are currently so far off the stock’s highs, positive information about the company, like details on the growth of users, should cause substantial percentage increases. Thus, Evercore analysts believe that the volatility connected with the Groupon Inc (NASDAQ:GRPN) name will continue for some time.

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