When CEO Andrew Mason was featured on Bloomberg Businessweek in July, Groupon (GRPN) shares were still trading at around $10. The CEO talked about the daily deal, which helped the company build a network of relationships with customers and merchants. Since the article was published, shares are now trading at around half that, and 85% below its 52-week high.
Investors are giving up on Groupon. Previous backers are selling. Venture capitalist Marc Andreessen sold, Fidelity Management reduced its stake by 6.2 million shares to 13.2 million (as at June 30), and Maverick Capital sold 4.35 million shares.
Investors are rightfully worried that accounts payable figures will be worse next quarter, which would hurt cash levels and earnings for the company. Marketing costs are also increasing substantially, as the company grows internationally.
Taken from Kapitall’s Number Cruncher and looking at the bar-chart trend, there are some alarming figures:
- Under liabilities, Deferred charges more than doubled from the previous quarter
- Deferred Charges and Taxes Income more than doubled
Which companies may face weakness along with Groupon, as investors grow more weary in the social media sector?
1. Groupon, Inc. (GRPN, Earnings, Analysts, Financials): Market cap at $3.04B, most recent closing price at $4.65.
2. Zynga, Inc. (ZNGA, Earnings, Analysts, Financials): Market cap at $2.27B, most recent closing price at $2.99.
3. Pandora Media, Inc. (P, Earnings, Analysts, Financials): Operates as an Internet radio company in the United States. Market cap at $1.56B, most recent closing price at $9.34.
4. Renren Inc. (RENN, Earnings, Analysts, Financials): Operates a social networking Internet platform in China. Market cap at $525M, most recent closing price at $4.0.
5. Facebook, Inc. (FB, Earnings, Analysts, Financials): Market cap at $42.87B, most recent closing price at $20.01.
Companies trading close to or above their IPO price are:
6. Yelp, Inc. (YELP, Earnings, Analysts, Financials): Market cap at $1.24B, most recent closing price at $20.22.
7. LinkedIn Corporation (LNKD, Earnings, Analysts, Financials): Operates an online professional network. Market cap at $10.88B, most recent closing price at $102.92. Yelp traded sharply lower from its $26 peak in August. Investors fear Google’s (GOOG) acquisition of Frommer will hurt the company.
Companies holding Groupon shares include:
8. T. Rowe Price Group, Inc. (TROW, Earnings, Analysts, Financials): A publicly owned asset management holding company. Market cap at $15.76B, most recent closing price at $62.09. T Rowe Price added 21.4 million shares in Groupon, and holds 75.1 million shares.
9. Morgan Stanley (MS, Earnings, Analysts, Financials): Provides various financial products and services to corporations, governments, financial institutions, and individuals worldwide. Market cap at $29.39B, most recent closing price at $14.83. Morgan Stanley was the lead underwriter for Groupon’s IPO and holds 15.7 million shares of Groupon.
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Analyze These Ideas: Getting Started
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Dig Deeper: Access Company Snapshots, Charts, Filings
- Groupon, Inc. (GRPN, Chart, Download SEC Filings)
- Zynga, Inc. (ZNGA, Chart, Download SEC Filings)
- Pandora Media, Inc. (P, Chart, Download SEC Filings)
- Renren Inc. (RENN, Chart, Download SEC Filings)
- Facebook, Inc. (FB, Chart, Download SEC Filings)
- Yelp, Inc. (YELP, Chart, Download SEC Filings)
- LinkedIn Corporation (LNKD, Chart, Download SEC Filings)
- T. Rowe Price Group, Inc. (TROW, Chart, Download SEC Filings)
- Morgan Stanley (MS, Chart, Download SEC Filings)
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