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 Becomes Its Own Best Deal

Stocks in this article: GRPN AMZN GOOG FB YHOO

NEW YORK ( TheStreet) -- Shares of beleaguered deals giant Groupon (GRPN) are soaring, up more than 23% to $10.78 following the company's second-quarter earnings report, which arrived better-than-expected.

I've spent a great portion of 2012 wondering if Groupon, which arrived on the scene with plenty of fanfare would ever live up to its promise.

Groupon investors, meanwhile, didn't appreciate what was perceived as unfair attacks on the company. But those questions needed to be raised, especially when the company's 2012 existence culminated with Andrew Mason, now its former CEO, being named the worst CEO for all of 2012.

On Wednesday, none of that mattered. The company reported a loss of a penny per share on revenue of $608.7 million. When excluding one-time items, earnings arrived at 2 cents per share -- in-line with Street estimates. Business in North America, which shot up by 45%, was not only extraordinary, but the performance also helped offset a 20% decline in international sales. This means that Groupon's becoming more balanced.

Even more impressive, though, was that the company reported 50% of North American sales were made on mobile devices. As with the positive reaction to Facebook's (FB) stock after the social media giant demonstrated its new mobile capabilities, Groupon investors cheered the progress in mobile purchasing. This has always been a popularly cited bear argument, especially from a competitive leverage standpoint. I have to admit, this caught me by surprise.

What was not a surprise, however, was that the company announced that co-founder Eric Lefkofsky, would remain as permanent CEO since replacing Andrew Mason, who was fired on Feb. 28. On more than one occasion, I've mentioned that Lefkofsky, despite his checkered past, was the best candidate to try to lead Groupon and prove that its deals concept could work.

This is not a situation where I'm trying to now take credit for the company's performance. While I've always liked Groupon's concept, I've never bought into the idea that the company could make any money, especially with more prominent names like Google, Amazon (AMZN) and Yahoo! (YHOO) circling the waters. So with my having such a bearish track record, I'm not going to pretend to suddenly be in love with the company.

1 of 2

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 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

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