Groupon Shares Soar On Takeover Speculation

  @DavidZie on December 07 2012 4:45 PM

 

Shares of e-commerce site Groupon Inc. (NASDAQ:GRPN) soared nearly 23 percent in late Friday trading on speculation the troubled shopping site might be acquired.

 

At the close, shares of the Chicago-based Groupon were up 88 cents to $4.68, a three-month record. Most of the gain came in the last 90 minutes of trading. Analysts, such as Tom Telsey of Forte Advisory, suggested the company may be attractive to Google (NASDAQ:GOOG), the No. 1 search engine.

 

At the same time, Schaeffer's Options Center noted unusually high volumes in options for Groupon, with 12,000 call contracts compared with only 4,000 puts, implying the shares had been oversold, so that short sellers were just trying to liquidate their positions before the end of 2012.

 

Earlier this week, Eric Best, CEO of Mercent Group, an e-commerce specialist, said Google Shopping has seen gains of 65 percent over last year's holiday season. Groupon specializes in matching consumers with daily deals.

 

A year ago, before Groupon's much-delayed initial public offering, Google, of Mountain View, Calif., had expressed interest in the site. But Groupon CEO Andrew Mason and its venture capital investors preferred to conclude the IPO.

 

Since then, shares of Groupon had slid 80 percent through Thursday, lowering the company's market value to only $3 billion.

 

Mason last week survived a directors meeting at which he was expected to be ousted due to the share decline as well as its lack of profit in three of the last four quarters.

 

Neither Groupon nor Google issued comments Friday. Shares of Google fell $6.92 to $684.21.

 

Join the Discussion