Updated from 9:59 a.m. EST to provide additional analyst comments in the ninth paragraph.
The Chicago-based online commerce company reported fourth quarter results yesterday that were much worse than Wall Street expected, with the company in the midst of a business model pivot. Groupon is moving from the once-lucrative model of daily deals into more direct e-commerce sales, bringing it into competition with powerhouses Amazon (AMZN) and, to a lesser extent, eBay (EBAY).
So far, the shift in model looks like a train wreck, with Groupon's operating and free cash flows plunging year over year. Operating cash flows fell 61% year-over-year to $65.7 million, compared to $169.7 million in the fourth quarter of 2011. The decline in free cash flow was even worse, plunging 83% year-over-year to $25.7 million. Despite the sharp drops, Groupon still had $1.2 billion in net cash and cash equivalents at the end of 2012.Wells Fargo analyst Jason Maynard is a Groupon skeptic. "
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