By Tricia Duryee, Groupon Stock Now Half Off
Many retailers are enjoying a Thanksgiving shopping spree lift from investors, but not Groupon.
Its shares closed today down nine percent, settling at $15.24 after bouncing off a new low of $14.85. That’s less than half the $31.14 that some investors paid at the stock’s high point, just after it went public in early November. More recently, it has been trading in the low to mid-$20s.
The drop is especially painful because it puts the company’s market valuation below $10 billion.
The high-flying media darling was once the talk of the town, quickly snubbing Google’s $6 billion buyout offer and then rumored to be seeking a public valuation of $25 billion.
But the Chicago-based company faced several controversies in its lead-up to the offering. It lost high-ranking executives and more than once was forced by regulators to change the way it reported its finances.
Still, on IPO day, all the fuss seemed to be over and done.
Groupon priced its shares at $20, several dollars above the expected price range of $16 to $18, and ended up raising $700 million at a valuation of close to $13 billion. That was just shy of its initial goal of raising $750 million.
Today’s stock dive during one of the headiest times of the year for shopping may show that the enthusiasm was misguided, although some of its social media peers are also trading down.
However, since its public debut, Groupon has failed to make a big splash of any kind. A major new feature, which is key to delivering relevant offers to the right consumers, was lamely supported by an amateurish YouTube video featuring two product guys. And today, the company didn’t really feature anything special for Cyber Monday except for offering discounts on a few recommended gifts. Meanwhile, its next closest competitor, LivingSocial, pulled out all the stops by offering gift cards to major online retailers, such as one from Blue Nile that gave shoppers the opportunity to spend $200 for $100.
If anyone felt today’s drop it was Groupon CEO Andrew Mason, who did not return emails seeking comment.
Mason, who was at least temporarily worth around $1.3 billion back on Nov. 4 when the company went public, is now worth somewhere closer to $715 million.