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Groupon Leap Screams 'Insider Trading'

Moreover, there are plenty of other reasons to be bearish on the Groupon model. Competition is fierce and still intensifying. Profits are still elusive, and the long-term value add to customers is, in my opinion, negative. I was bearish when the stock dipped below $10, so I'm seeing the spike as an opportunity for those with the willingness to establish short positions.

If you were skeptical about Groupon's business model before but didn't quite have the guts to short the stock (a description that fits me quite well), you might be tempted a bit more now that shares have surged 40% in a matter of hours. Throw in the fact that insider trading is apparently par for the course, and there's a strong argument building on the short side here. This is not the time to start chasing returns. If anything, it's once again time to short Groupon.
At the time of publication, Johnston had no positions in the stocks mentioned.

Michael Johnston is the senior analyst and founder of ETF Database, a Web-based investment resource providing actionable ETF investment ideas and an ETF Screener for investors analyzing potential ETF investments. Johnston oversees ETF Database's free ETF Newsletter, one of the most popular sources for news and commentary focusing exclusively on the exchange-traded fund industry. Johnston also maintains and develops content for ETFdb Pro, a line of analyst reports and model portfolios designed to help investors utilize ETFs to meet their investment goals.

Johnston has completed the Chartered Financial Analyst (CFA) program, and obtained his bachelor's degree in finance from the University of Notre Dame. Prior to founding ETF Database, Michael worked in a private client service group performing valuations of companies operating in a wide range of industries.

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