Just yesterday TNW brought you the news that Groupon was having stark difficulties in the public market, hitting a new record low. That stock price put its total value below the buyout offer that Google had previously offered it.
Today, however, is a repeat. Instead rallying from its more than 5% loss, Groupon today has lost another 5% chunk, declining under $8 a share for the first time. The company went public at $20 a share. Currently, the company is valued at just $70 million over the $5 billion mark.
I suspect that $5 billion is an important psychological barrier for Groupon, as it is the price that Google offered, before the also propsed earn-out was included on top. From Google Finance, here’s how things look, in mid-day trading:
What is going on? Not only has Groupon recently ‘unlocked,’ allowing insiders to sell their shares, but all gains from a recent, strong quarterly report have been lost, and more. Why? As we noted yesterday, on the issue:
According to the influential Crain’s Chicago Business, the latest slipping in Groupon’s public share price “started last week when a Wall Street analyst lowered his earnings outlook for next year and Chairman Eric Lefkofsky said he’d be spending more time on venture capital firm Lightbank.”
Whenever an executive makes a statement like that, it can shake investor confidence. For Groupon, however, a company that has a non-stellar record thus far as a public firm, the news carried a little more weight than it might have at a different enterprise.
Whatever weakness that Groupon was suffering from yesterday remains acute, from an investor perspective. The larger markets are off slightly on the day, but nothing on the scale of Chicago’s Groupon; the company’s hard decline is its own.
How low will Groupon go before it become cheap enough to attract a new class of boosters? That’s anyone’s guess, but for the moment it appears that the answer is an emphatic lower.
Top Image Credit: TechCrunch