Groupon operates as a local commerce marketplace that connects merchants to consumers by offering goods and services at a discount in North America and internationally. The company sends daily emails to its subscribers regarding discounted offers for goods and services that are targeted by location and personal preferences.
I find a bullish argument for Groupon elusive. While I'm not short and wouldn't short the company primarily out of takeover risk, it's anything but surprising to see short interest over 15% of the float. I am almost exclusively a short-seller, and I can say with confidence that shorts don't enjoy holding a short position with this much short interest. In order for short-sellers to hold positions with a small-priced ticker, they require a high confidence level the company is significantly overvalued by investors. In other words, the smartest minds are screaming at the top of their lungs that Groupon is overpriced. They could be wrong, but are usually spot on. GRPN Revenue Quarterly data by YCharts
At the time of publication the author had no position in any of the stocks mentioned. Follow @RobertWeinstein This article was written by an independent contributor, separate from TheStreet's regular news coverage.