Groupon Falls After Tiger Global Discloses Stake Cut
Groupon Inc. (GRPN)’s shares declined after Tiger Global Management LLC slashed its stake in the daily-deals provider.
The shares dropped 4.2 percent to $9.78 at the close in New York. Chicago-based Groupon has lost about half its value since an initial public offering in November 2011, though it has more than doubled this year amid optimism that discounts aimed at smartphone and tablet users may bolster sales.
Tiger cut its investment by 72 percent to 18 million shares in the second quarter, the New York-based fund disclosed in a regulatory filing yesterday. The move suggests that Tiger sees limited potential for Groupon’s stock to keep rising, according to Tom Forte, an analyst at Telsey Advisory Group.
“Groupon had a tremendous run in a short period of time and Tiger made some incredible gains,” said Forte, who has a $13 target price on the shares. “They may feel like they have more upside in another stock, so they may be reallocating Groupon profits into another stock with more potential for upside.”
Tiger is now Groupon’s ninth-largest investor, with about a 2.7 percent stake, according to data compiled by Bloomberg. The hedge fund added 63.7 million shares in the quarter ended Dec. 31. At the time, Tiger held about 10 percent of the shares, a position valued at $316 million at the end of last year, according to data compiled by Bloomberg.
Erin Yeager, a spokeswoman for Groupon, didn’t respond to a request for comment. Carolyn Sargent, a spokeswoman for Tiger, declined to comment.
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