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Groupon Essay

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Amazon’s rise to prominence has reshaped the way investors look at the retail sector. In doing so, more companies are devoting an increasing amount of resources to growing out their omni channel capabilities. Some have decided to ditch the brick and mortar model all together and approach retail in a similar vein as Amazon. One of those names is Groupon, which operates an online marketplace primarily focused on offering the best local deals and coupons. Groupon is undeniably a leader in local markets, but its problem is they can’t compete in the overall retail space. This has led to a breakdown in the underlying fundamentals and driven the stock lower in recent months. Early November marked the one year anniversary of Rich William’s appointment as CEO of the company. Under …show more content…

During the third quarter quarter cash flow dropped to negative $53.7 million, bring the trailing twelve month total to $14.7 million. Given a tepid financial outlook some experts believe that the stock is overvalued, even at $4 per share. Shares are now down 27% in the past 3 months with a majority of those declines coming after its Q3 results. This caused a technical breakdown that could lead to uninterrupted declines for the remainder of 2016. Key indicators like the MACD and On Balance Volume linger in or around negative territory, reflecting the possibility of a sustained downturn. Adding to its misfortunes, the 200 day moving averaged recently crossed the 20 day in a bearish manner and is slowly looking to take over the 50 day. In the past few months Groupon agreed to purchase LivingSocial for an undisclosed amount and launched its on demand food delivery service, Groupon Go, in select cities. Although these initiatives will support top line growth moving forward, it's unlikely to considerably advance overall financial performance. Keeping this in mind investors would be wise to proceed with caution before holding the

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Groupon is an online service that delivers coupons to consumers through a middleman service that deals directly with local businesses. They offer deals approved directly by the business and split the profits from said deals evenly. An example to illustrate would be buying a bowling pass for $20. Split 50/50, Groupon and the bowling alley would each receive $10. The service is offered for all kinds of businesses and isn’t limited to services and is applied to goods that are being sold at a discounted rate as well.

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