The stock price of Groupon Inc (NASDAQ:GRPN) declined as much as 5%, but was able to recover during the latter part of the trading session on Wednesday. The shares of the daily deals company closed $6.75, down 0.44%.
Groupon’s May business volume disappoints
The downward movement of the stock of Groupon Inc. (NASDAQ:GRPN) was negatively affected by the comment of Steven Wenstein, the senior internet analyst at ITG Investment Research.
According Weinstein, Groupon’s business volume in May was disappointing. He also reduced his estimated for the company’s domestic billings from $770 million to $745 million for the second quarter.
Weinstein noted that the amount of purchases on Groupon Inc (NASDAQ:GRP) in the second quarter through May were flat compared with the same period last year. The amount was down compared with the first quarter.
Last month, the daily deals company reported $1.82 billion in gross billings, $757.6 million in revenue, $40.3 million in adjusted EBITDA and GAAP loss of $0.06 per share for the first quarter. Groupon CEO Eric Leftkofsky said the company’s worldwide billings rose 29%, and reached the highest level.
He added that Groupon’s marketplace continued to gain traction; its mobile business growth accelerated with more than ten million app downloads during the period. Its mobile transactions reached 54% in March.
Groupon stock rallied
The shares of Groupon Inc (NASDAQ:GRPN) rallied on Monday after analysts at Piper Jaffray said they perceived signs that the turnaround plans of the company is working.
Piper Jaffray analyst, Gene Munster reiterated his Overweight rating for the shares of Groupon Inc (NASDAQ:GRPN) with $16 price target. According to him, his proprietary deal tracking shows the company’s daily deals have been increasing steadily and available on its website.
Separately, the daily deals company announced its acquisition of SnapSaves, a Canadian grocery coupon app. The acquisition was viewed positive for Groupon because of the popularity of the app.
Groupon Inc (NASDAQ:GRPN) also gained yesterday as trading volume increased. Trade-Ideas noted that the average dollar volume of the company was $101 million, and it traded in a range of 220% of “the normal price range with a price range of” 51 cents. Groupon also traded higher than its daily resistance level.