Groupon Stock Drops Yet Again, Second Thoughts Abound
Daily deals site Groupon has had quite the time ever since turning down Google’s $6 Billion offer. One would be safe to think that they should have taken the offer when they had the chance. While their IPO started off on a high note back in November, stock has dipped below the IPO price with shares falling 2.6%, not counting the 6.6% drop yesterday.
It seems that one of the biggest causes for the drop is that business interest is waning.
“About half the businesses that have offered an online deal-of-the-day in the past aren’t planning to do so again in the next six months, according to a survey published on Jan. 2. The study, by Susquehanna Financial Group and daily-deal aggregator Yipit, showed that merchants were concerned about a low rate of repeat business from new customers gained through such offers.”
Also, news of various businesses not having the best experience, especially the baker who lost tens of thousands of dollars, definitely doesn’t help. In the beginning, interest was great and the daily deals site did fantastically well. As time went on, questionable practices popped up, concerns started to be raised.
“Margins are already shrinking. The amount of billings booked as revenue narrowed to 37 percent in the third quarter from 42 percent in the prior period and 44 percent in the first quarter. Chicago-based Groupon attributes the decline to getting into new products, such as travel and event tickets.”
Can they rebound? Can they continue to push forward, or will they continue to fall backward? With competitors such as LivingSocial and Google Offers, Groupon needs to remember that they’re not the only daily deals site in town.
