Groupon Shares Tumble After First Public Earnings Announcement Falls Well Below Street Expectations

Shares of daily deals Web site Groupon, Inc. (NASDAQ: GRPN) fell after the Chicago-based company reported a net loss in its first earnings announcement since its initial public offering.

Groupon shares fell 12.53 percent to $21.50 as of 5:40 p.m. EST after closing up 1.61 percent to $24.58.

The net loss attributable to the company was $42.73 million, or 8 cents a share, in the fourth quarter of 2011, which ended Dec. 31. Analysts had expected net profits of $21.51 million, or 3 cents a share, according to estimates compiled by Thomson Reuters. Operating income was $15.03 million, with CEO Andrew Mason mentioning in the earnings call that this was the first quarter where the company turned an operating profit.

Sales totaled $506.5 million, better than the expected $475.15 expected from analysts. Gross billings -- company revenue before payment to merchants -- tallied $1.25 billion in the fourth quarter.

Shares of Groupon have been tumultuous ever since the company went public in early November. Shares jumped 30 percent on the first day, but then began to tumble over fears that the company was overvalued. The stock fell below its IPO price less than three weeks after the company went public, although shares have clawed their way back since then.

The firm had plans to go public earlier in 2011, but was forced to pull back due to instability in the stock market and concerns about accounting measures used to report previous quarterly earnings.

Groupon was valued at $12.7 billion at the time of the IPO, well short of the $25 billion the company hoped for earlier last year. But many analysts believed the company was overvalued. Research firm Morningstar valued the company a mere $5 billion.

Groupon is the largest U.S.-based daily deals site in terms of market share.

About 250,000 merchants across 47 countries took advantage of the site in 2011, according to the company. A merchant survey put out by Bank of America suggested that 72 percent of merchants involved with the company plan to repeat their involvement in the company, while another 12 percent answered maybe.

Groupon expects operating income of $15 million to $35 million in the first quarter of 2012 based on $510 million to $550 million in revenue.