This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Groupon Shares Continue Free Fall

Stocks in this article: GRPN

NEW YORK ( TheStreet) - Shares of Groupon (GRPN), which soared 40% two weeks ago during the daily deal site's IPO, continued to crater on Wednesday.

The stock was losing 14.4% to $17.18 in late morning trading. The session low is $16.84. Volume continued to be elevated with more than 5 million shares changing hands by midday. Wednesday's decline follows a 15% drop on Tuesday.

Groupon's fall comes amid a broader decline in buzzy Internet stocks like Pandora (P) and LinkedIn (LNKD). Shares of Pandora were down 11.5% despite beating third-quarter earnings on Tuesday, while LinkedIn slid 3.3%.

"The market is throwing out anything with high risk and uncertainty, including companies that don't have a lot of operating history," said Daniel Ernst, an analyst with Hudson Square Research.

Still, Groupon was hit harder than the Nasdaq, which was dropping 2.0% in morning trading on Wednesday.

A number of factors may be influencing Groupon's slump, analysts say.

LinkedIn, which saw shares drop after its 180-day lock-up period expired earlier this week, may have contributed to investor fears that Groupon will experience a similar decline when its lock-up ends, said Scott Sweet, senior managing partner at IPO Boutique. The business social network also saw the departure of early investor Bain Capital, which sold its entire 4.3% stake in the company.

Competition from rival LivingSocial may also be to blame. This week, the company announced Black Friday deals from over 20 national retailers including Verizon Wireless (VZ) and Electronic Arts (ERTS), which may put pressure on Groupon to ramp up its on marketing spend in response.

"A competitor has huddled up and beat the omnipotent Groupon with a neat idea," Sweet said.

LivingSocial is also rumored to be raising a $200 million funding round.

It's also become easier in the last week for investors to borrow more Groupon stock in order to short it, which may have pushed the price down, said Jeff Sica, president and chief investment officer of SICA Wealth Management.

-- Written by Olivia Oran in New York.

>To follow the writer on Twitter, go to

>To submit a news tip, send an email to:

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 18,030.21 +6.04 0.03%
S&P 500 2,081.88 -0.29 -0.01%
NASDAQ 4,773.4720 +8.0480 0.17%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs