Groupon shares dip as sales fail to meet expectations

14/08/2012

Groupon has seen its shares fall this week after seeing its revenues fall short of forecasts, despite posting a sound quarterly profit. The online shopping deals giant posted a profit of $28.38 million on revenue that climbed 45 percent to $568.3 million in the quarter ended June 30.

But its stock tumbled nearly 20 percent due to a disappointing forecast for the months ahead.

"We had a solid quarter despite challenges in Europe and continued investment in technology and infrastructure," said Groupon chief executive Andrew Mason. "We've deepened our relationships with a growing base of merchants and customers worldwide."

However, investors were unhappy with revenue that was less than analysts expected and a scaled back forecast for the current quarter.

The company made its stock market debut at $20 per share in November and peaked above $31 dollars a share.

In February Groupon issued its first earnings report as a publicly traded company, saying it failed to turn a profit despite revenue nearly tripling from a year earlier.

Groupon shares were listed on the Nasdaq on November 4 in a blockbuster public offering that raised a whopping $700 million and triggered fears that investors may be foolishly overvaluing hot Internet startups.

Groupon, which rejected a $6 billion takeover offer from Google a year ago, has enjoyed phenomenal growth since its founding in 2008 but has been dogged by questions about its business model and accounting methods.

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