Groupon Slide Continues as Some Investors Cut Stakes

Groupon Inc. (GRPN) declined as much 5.3 percent, extending a slump that pushed shares to a record low last week, after reports that some of the daily-deal website’s largest investors had trimmed their stakes.

The shares fell as low as $4.50, and were down 3.2 percent to $4.60 at 9:34 a.m. in New York. Groupon retreated 5 percent to $4.75 at the close on Aug. 17 on speculation that billings could decline, widening the plunge since the IPO to 76 percent.

At least four Groupon investors who had stakes before the company’s November initial public offering, including venture backer Marc Andreessen, have sold shares since then, the Wall Street Journal reported. Fidelity Management & Research trimmed its stake by 6.2 million shares to 13.2 million in the quarter ended in June, according to data compiled by Bloomberg. Maverick Capital reduced its holdings by 4.35 million shares to 1.98 million over that period, the data show. Kinnevik Investment AB said in June that it divested its direct holding in Groupon of 8.34 million shares.

The Chicago-based company makes money by selling discounts -- known as Groupons -- from businesses such as restaurants and nail salons. It then splits the revenue with the businesses. Groupon earlier this month reported second-quarter revenue that missed estimates as economic weakness in Europe curbed online coupon sales.

One of Groupon’s largest investors, T Rowe Price Associates Inc., added 21.4 million shares to its stake, for a total of 75.1 million, according to data compiled by Bloomberg. Morgan Stanley (MS), one of the lead underwriters for Groupon’s IPO, added 8.19 million shares, for a total of 15.7 million, the data show.

To contact the reporter on this story: Lisa Rapaport in New York at lrapaport1@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net

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Aug. 20 (Bloomberg) -- Lawrence Haverty, a portfolio manager at Gamco Investors Inc., talks about a lack of merger activity. Haverty speaks with Erik Schatzker and Sara Eisen on Bloomberg Television's "Surveillance." William Cohan, author and Bloomberg View columnist, also speaks. (Source: Bloomberg)