On 1-year anniversary of IPO, Groupon shares plunge to record low
The stock chart for Groupon is a scary thing to behold, especially for investors.
In the year since the daily-deals website made its public debut, the trajectory of its stock has been down, down, down.
Shares, which were priced at $20 each, opened at $28 on Nov. 4, 2011. But during intraday trading on Friday, shares hit a record low of $3.69.
That’s a nearly 87% free-fall and an 8% slide from Thursday’s $4.03 close. It was also the first time Groupon stock has ever dipped below $4 -- a red flag of an anniversary present.
Launched in 2008, Groupon was initially considered to be a brilliant concept targeted at consumers in recessionary shock.
Since then, however, analysts have badgered the company about its business model, which they claim is unsustainable. The Chicago-based company had to re-report its fourth-quarter and full-year earnings after underestimating the size of the pot needed for customer refunds. In April, it rejiggered its board of directors.
And although the daily-deals industry is still young, it’s already crowded with competitors such as LivingSocial.
Back in May, Groupon Chief Executive Andrew D. Mason wrote to shareholders that the company would “profoundly change the way we shop locally.”
Groupon, he wrote, is “setting out to reinvent the multi-trillion-dollar local commerce ecosystem.”
The company will report quarterly results next week.
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