The stock price of daily deal giant Groupon jumped 15% two days after Tiger Global Management (Tiger) revealed a 9.9% stake in the company, bringing the stock price gains for the week to about 30%. This was the second daily gain for Groupon stock after Tiger’s public disclosure of its ownership in the company grabbed investor and public attention.
As a prominent hedge fund, Tiger’s investment seemed to show that savvy investors who are supposed to know think the company has a great business model. Groupon has come a long way since their IPO in November 2011, which was called the word internet IPO of 2011 by Investing Daily editor Jim Fink. Edward Woo, a stock analyst at Ascendiant Capital Markets said, “Now that we have a really smart investor taking a really big stake in the company, investors may be saying it’s worth jumping in now.”
This news comes at nearly the same time Groupon announced the launch of its third annual Grouponicus Wintertime Celebration, a collection of sales, promotions, deals and more. Among the many promotions in this year’s Grouponicus are free shipping and free returns. Many companies are offering free shipping, but free returns are an added offering from Groupon this season. The promotions this year include a sweepstakes each day giving consumers a shot at winning $1,000 worth of Groupon Bucks. Another interesting Groupon offering this holiday season is what they are calling Grouponcierges, which are their in-house gift advisors who help shoppers find the perfect gift for everyone on their shopping list.
Groupon CEO Andrew Mason will be speaking next week at an annual conference called Ignition, with CEOs of several other technology companies. He is expected to outline Groupons strategy and will be on the agenda with CEOs of other high profile internet companies including Linkedin and Yelp. It will be interesting to see what Mason unveils at Ignition in light of the other coupon and daily deal companies that have entered the fray including Living Social, Saveology, BuyWithMe, Google Offers and others.
While there are certainly many others within the category, Living Social is Groupon’s biggest competitor and they have launched their own holiday promotions featuring products from Fab, a company Living Social is partnering with. The promotions will feature fifty products, with another fifty set to go online as early as next week.
Things for Groupon look good right now, and there is heavy anticipation of what will be unveiled at next week’s Ignition conference. But Groupon is not without its detractors and stiff competition that has plans of their own to make big splashes this holiday season. Those who own Groupon stock already are likely happy they have it and there are many investors in the know who think there is reason to be optimistic about the future. If you like the technology sector and have an interest in holding a position in a growing internet company you may want to check back for what Groupon has to say when they roll out their strategy at next week’s conference.