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Groupon Becomes Its Own Best Deal

NEW YORK ( TheStreet) -- Shares of beleaguered deals giant Groupon (GRPN - Get Report) 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 - Get Report) 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 - Get Report) and Yahoo! (YHOO - Get Report) 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.
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