Groupon’s share price tumbled more than 15 percent late Tuesday (Aug. 5), as investors balked at the Chicago firm’s expensive eCommerce investments. Groupon reported a net loss of $22.9 million, which seemed far worse to analysts because, according to an analyst poll by Thomson Reuters, most analysts had forecast a $6 million profit.
Quarterly sales sharply increased 24 percent to $751.6 million, which was a good showing, had it not been for those deep investments in marketing, IT and product development. “The results marked a disappointing end to the first year of Chief Executive Eric Lefkofsky, who was named permanent CEO in June 2013 following an interim stint after the dismissal of co- founder Andrew Mason,” said The Wall Street Journal.
A key part of the costs are efforts from the new CEO to shift the business’s focus from E-mailed daily deals to mobile campaign discounts and physical good distribution. Groupon even is trying to get into the retail POS business, to compete with PayPal and Square.
“We’re a business in transformation,” the Journal quoted Lefkofsky saying in an interview. “We’re still in investment mode. We believe we can accelerate our business.”
We’re always on the lookout for opportunities to partner with innovators and disruptors.
Learn More