Groupon Falls After Revenue Forecast Goes Without a Boostby
Shares fall as much as 17 percent, most since November
Web marketplace sees 2016 revenue as low as $2.75 billion
Groupon Inc. fell the most in almost six months after the online marketplace kept its 2016 revenue forecast unchanged, disappointing investors.
The shares dropped as much as 17 percent to $3.66 Friday in their biggest intraday decline since Nov. 4. In a statement Thursday after trading hours, Groupon said it expected 2016 sales of $2.75 billion to $3.05 billion. Analysts projected $3.01 billion, the average of estimates compiled by Bloomberg. The lowest estimate was for $2.9 billion.
Struggling since its IPO to spur growth and profit, Groupon replaced Chief Executive Officer Eric Lefkofsky in November. New CEO Rich Williams has increased the marketing budget to revive and reinvent the company. Groupon has streamlined its business abroad and now operates in 28 countries, after exiting 17. On a conference call Thursday, Williams said he will continue to evaluate its “country footprint.”
The reiterated forecast overshadowed Groupon’s first-quarter results. The company reported sales that topped analysts’ estimates and a narrower-than-expected loss. Also on Thursday, the company named Mike Randolfi, a former CFO of Orbitz Worldwide, as its new chief financial officer, succeeding interim CFO Brian Kayman.
Groupon’s stock surged earlier this year after Alibaba Group Holdings Ltd. bought 33 million shares of Groupon, making it the fourth-largest shareholder in the company. The Chinese e-commerce giant owned 5.6 percent of Chicago-based Groupon as of Dec. 31, according to a regulatory filing.
Earlier this month, a new firm backed by Comcast Corp. invested $250 million in Groupon. The companies will work together to “identify and implement potential strategic partnership opportunities,” according to a statement. Groupon said it would use the proceeds to repurchase its shares.