Groupon Inc (GRPN) Shares Jump On Google Acquisition Rumors

Updated on

Groupon Inc (GRPN) Shares Jump On Google Acquisition Rumors

Groupon Inc (NASDAQ:GRPN) ended the week on a bang, as its shares are up almost 23 percent late on Friday afternoon.

This represented its greatest jump in six months and now rumors are swirling.

Volume has stayed in its same trading range, reported Benzinga, but there’s speculation that there’s some short covering taking place, as there’s been as much as 12 percent of the float being sold short recently.

Options traders got in on the action as 12,000 call contracts had traded earlier on Friday vs. the less than 2,500 puts. The option of choice was the Jan 2013 5 call. It was the most actively traded strike with 2,025 contracts exchanged at one point.

But Bloomberg has a more interesting take on Friday. First, it posted a video headline that discussed Tiger Globe hedge fund taking a 9.9% stake in Groupon. This was old news from November.

Then it put out a story that Google Inc (NASDAQ:GOOG) could be a possible suitor for the company.

Groupon Inc (NASDAQ:GRPN)’s shares jumped more than 20 percent, with a $4.69 share price intraday on Friday, representing its greatest intraday gain not seen since May 15. Through Thursday, the stock had shed 81 percent of its value since going public 13 months ago.

With the stock’s large fall since its November, 2011 IPO, it could have spurred an interest from Google  Inc (NASDAQ:GOOG) again. The year prior to hitting the public markets, Google Inc (NASDAQ:GOOG) had expressed an interest in a Groupon acquisition for $6 billion, reported Bloomberg. From Groupon’s 50 percent loss of market value, Google may again be interested, according to Tom Forte, a Telsey Advisory Group analyst.

Forte said via Bloomberg, “Where the stock is currently trading, it’s a takeout candidate. If Google was interested at $6 billion, I think it’s a possibility.”

Groupon Inc (NASDAQ:GRPN) spokesman Paul Taaffe wouldn’t comment on the speculation of a takeover, nor would Google spokeswoman Katelin Todhunter-Gerberg, reported Bloomberg.

Since Groupon Inc (NASDAQ:GRPN)’s IPO one year ago, its growth has slowed down, as well as the demand for daily deals. Chief Executive Officer Andrew Mason has had problems with the company’s core business and its move into new areas for additional revenue sources.

There have been recent stories questioning why the company hasn’t gotten rid of Mason. He agreed, saying last week via CNN that, “It would be more noteworthy if the board wasn’t discussing it.”

The company supposedly has given some “quasi-support” to its leader, by saying its board and management “are all working together with heads down to achieve Groupon’s objectives.” Some of the media took this as a positive sign for Mason’s job security; a Groupon Inc (NASDAQ:GRPN) spokeswoman would not comment on it.

Leave a Comment