Groupon Falls as Lockup Ends, Allowing Insider Sales
Groupon Inc. (GRPN), the largest daily coupon website, declined the most in a month as a lockup period expired, permitting insiders to sell shares.
Groupon dropped 8.9 percent to $9.69 at the close in New York. It touched as low as $9.53, the biggest intraday decline since April 30.
The coupon site is attempting to rebuild investor confidence after shares fell by half since the November initial public offering, among the worst market debuts for a Web company since the dot-com crash. Groupon’s stock has been battered by earnings restatements and the departure of Starbucks Corp. Chief Executive Officer Howard Schultz from the board, said Jeffrey Houston, an analyst at Barrington Research Associates in Chicago.
“All the negative headlines, the market overhang, it’s just kind of coming to fruition,” Houston said in an interview.
Groupon generates revenue by selling discounts -- known as Groupons -- from businesses such as restaurants and nail salons. It shares coupon proceeds with merchants.
The company in March reported a “material weakness” in its financial controls and said fourth-quarter results were worse than previously stated because of higher refunds to merchants. That followed a restatement of 2010 results in September because Groupon had counted the total amount of its daily-deal sales as revenue, including fees paid to merchants.
Groupon appointed Daniel Henry, finance chief of American Express Co., to its board on April 26 to replace Schultz, who stepped down.
The lockup expires today, Chicago-based Groupon said in a regulatory filing last month.
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