Date
21 July 2017
Groupon has surged 82 percent in two days, on top of a 29 percent gain on Friday. The stock has been struggling since its IPO to spur growth and profit. Photo: Internet
Groupon has surged 82 percent in two days, on top of a 29 percent gain on Friday. The stock has been struggling since its IPO to spur growth and profit. Photo: Internet

Groupon surges on Alibaba stake purchase

Groupon Inc. rallied for a second straight trading day after Alibaba Group Holding Ltd. bought a 5.6 percent stake in the online marketplace.

The purchase fired investor interest in Groupon’s move away from its roots as a daily deals provider, Bloomberg reports.

The Chinese e-commerce company bought 33 million shares of Groupon, according to a regulatory filing, making it the fourth largest shareholder in the website that has lost about 80 percent of its value since going public in November 2011.

Groupon shares vaulted 41 percent to US$4.08 at the close in New York, the biggest one-day gain since the Chicago-based company’s initial public offering.

The stock has soared 82 percent in two days, on top of a 29 percent gain on Friday.

Groupon has struggled since its IPO to spur growth and profit.

In November, the company replaced chief executive Eric Lefkofsky with Rich Williams, who has increased the marketing budget in an effort to revive and reinvent the one-time internet darling into a marketplace where shoppers can find deals on goods and services from restaurants to spa treatments and jewelry.

The company has exited 17 countries and now operates in 28 as it continues to streamline its operations internationally.

Alibaba’s stake was reported a day after Groupon reported fourth-quarter results that beat analysts’ estimates, driven by purchases in North America.

The company said profit excluding some costs was 4 US cents a share, compared with the average analyst estimate for a break-even quarter.

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