Groupon Inc CEO Unloads Shares In Open Transaction

Groupon Inc CEO Unloads Shares In Open Transaction
By GrouponRUS (Own work) [CC BY-SA 4.0], via Wikimedia Commons

Groupon Inc (NASDAQ:GRPN) CEO Eric P. Lefkofsky unloaded 454,166 shares of the company’s stock in an open transaction on Tuesday, October 14th. The shares were sold at an average price of $5.86, for a total value of $2,661,412.76. After the transaction, Lefkofsky now directly owns 431,455 shares in the company, valued at approximately $2,528,326, according to a filing with the SEC.

Increase in short interest

Short interest in Groupon stock increased in September, and at the end of the month it totaled approximately 85 million shares. This is an increase of 2.2% from the September 15th total of around 83.2 million shares.

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Several analysts have recently produced ratings for the daily deals company. Analysts at Evercore Partners downgraded the stock from Equal Weight to Sell, and assigned it a price target of $5.50 per share. Zacks analysts have placed Neutral rating to the stock, in a research note to the investors on September 25th. They assign a price target of $7.00. Separately, RBC analysts have upgraded Groupon shares from Underperform to Sector Perform, in a research note to the investors on September 2nd and assigned the firm a price target of $6.00 up from previous their price of $5.00. Overall, Groupon has an average rating of Hold and a consensus price target of $8.45.

Grim outlook from Groupon

Groupon is transforming itself from a daily deal email offering company to an e-commerce platform, and is also working to increase user engagement on the mobile platform. Ken Sena, an analyst at Evercore, is skeptical about the company’s ability to post 2014 its adjusted EBITDA forecast of $270 million. Additionally, Sena is only expecting a marginal rise in the shares unless the company sees substantial inflection in positioning among the consumers and merchants.

The company provided less than sanguine guidance for 3Q while announcing the second quarter results. For the third-quarter, Groupon guided for earnings in the range of 0 to 2 cents per share, whereas analysts had been estimating an EPS of 3 cents per share for the same period. Analyst EPS consensus is down by 67% to 1 cent per share after the sluggish outlook offered by the company.

Groupon has also lowered its full-year guidance for adjusted EBITDA from over $300 million to around $270 million. Full-year guidance is also below the $299.7 million consensus analyst estimate for the same period. Consensus estimates for Groupon adjusted EBITDA are down to $271.5 million for the year.

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