Groupon Inc (GRPN): Short Interest Declines In December

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Groupon shares saw a significant drop in short interest in the month of December. Total short interest came in at 86.6 million shares as of Dec. 15, which is a drop of 3% from the Nov. 28 total of 89.3 million shares. Around 18.7% of the company’s shares are sold short, and based on an average trading volume of 13.4 million shares, the number of days to cover is currently 6.4 days.

Positive signs for Groupon

Going by the recent results, Groupon’s turnaround strategy is paying off. The company posted encouraging third-quarter earnings in which gross billings spiked 39% to $1.86 billion. Revenue for the company came in at $757 million, which is an increase of 27%. Groupon posted adjusted EBITDA of $67 million, an increase from $40 million in the previous quarter. Groupon has geared up to implement a number of steps to continue its accelerate its growth.

In the mobile segment, the company is surging higher with increasing mobile transactions. Last quarter, Groupon’s app hit total downloads of 92 million. Additionally, the company is making efforts to enhance its growth in the domestic market as well as internationally. The collective efforts made by Groupon will help it reduce losses and generate strong income and lower the effect of the company’s latest acquisitions. The average number of unused Groupons per customer has declined 25% in the past year. This indicates that an increasing number of people are getting interested in buying, says a report from Seeking Alpha.

Potential ahead

Groupon knows for a fact that less than 5% of the available merchants on its platform are not positive for the company. Therefore, to cover the remaining 95%, the company has unveiled two new products (Pages and Gnome) which will help improve local offerings. Groupon pages are offering useful details such as contact information, maps and time of service, recommendations, tips, and various other discounts by creating a web and mobile presence for every local merchant, says the report.

Groupon is also fueling its e-commerce wing through the acquisition of the U.S.-based fashion site Ideeli and South Korean online marketplace Ticket Monster. The primary objective of the acquisitions is to turn the company into a full-fledged online marketplace rather than limiting it to a daily deals site.

Such initiatives and efforts from the company, along with falling short interest, are good enough reasons for investors to consider adding Groupon to their portfolios.

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