Groupon Plummets, But Tiger Global Still in The Green

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

If it helps, and we know it doesn’t, J.C. Penney Company, Inc. (NYSE:JCP) can take heart from how Groupon Inc (NASDAQ:GRPN) is performing today, as the stock is  plummets.

Investors in Groupon Inc (NASDAQ:GRPN) have gone into selling overdrive after hearing the bad news in Q4 earnings today. The above 20 percent decline in share price has taken all that Groupon had gained in 2013.

While others talk about how Groupon Inc (NASDAQ:GRPN) missed analyst expectations and how the company’s business model has flaws, lets take a look at those who made big bets on Groupon’s “Goods” future.

Groupon Plummets, But Tiger Global Still in The Green

Chase Coleman and Feroz Dewan’s Tiger Global of course comes at the top, Tiger Global’s ownership in Groupon Inc (NASDAQ:GRPN) was increased manifold in November, making 9.9 percent of the company which equals 65 million shares and amounted to $179 million on Nov 9 (date of event).

It looks like Tiger Global may not be losing yet, at least not until Groupon manages to stay above $3. Even after Groupon has fallen more than 20 percent today to $4.7, Tiger Global can still pocket around $126 million, if the firm hasn’t taken some profits yet.

Tiger cubs are usually not shaken by stock swings as witnessed when Nokia Corporation (NYSE:NOK), a popular short position with Tiger cubs, recovered in early January but the hedge funds held on strong and were not shaken by the short-lived gains (all European short positions).

However these are based on estimated buying prices, because of Tiger Global’s passive stake we cannot possibly know what his average price was and in how many intervals he bought the stake. If he bought the major chunk of Groupon in October, he would be very much on the losing side now.

Coatue Management initiated a position in the Groupon Inc (NASDAQ:GRPN) in Q4 as well with 7.5 million shares. It is harder to speculate on Coatue’s buying price, if the fund entered the trade before December, there might be no paper losses however if bought in Decmeber, the chances are that it is either flat or losing on the investment. Since Tiger cubs make synchronized movements there is strong likelihood that Coatue also bought Groupon somewhere in early November.

Groupon has fallen to $4.66, down 22 percent now.

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About the Author

Tabinda Hussain
Tabi covers hedge funds for ValueWalk. Although Tabi is an expert in hedge funds, her academic background is in Biology. Follow her on twitter @tabihussain

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