The poison pill came as Groupon “has taken note of the substantial increase in market volatility and uncertainty as a result of the Covid-19 pandemic, as well as its impact on Groupon’s stock price,” the company said in a Securities and Exchange Commission filing.
The stock has plunged 67% in the last three months.
On Feb. 19, even before the coronavirus turned into a pandemic, Wedbush Securities analyst Ygal Arounian said the chances for a sale of Groupon had risen after the company reported worse-than-expected fourth-quarter earnings and said it would stop selling goods.
Under the rights plan, Groupon is issuing one right for each share of common stock outstanding at the close of business on April 20, 2020.
The rights will become exercisable if a person or group becomes the beneficial owner of 10% or more of the Company’s outstanding common stock, including in the form of synthetic ownership through derivative positions, or 20% or more in the case of eligible passive investors.
The furloughs are part of a cost-cutting effort that includes a hiring freeze, eliminating merit raises, eliminating cash compensation for non-executive board directors and reducing marketing expense by significantly shortening payback thresholds and delaying brand marketing investments.
This may not be the end of “workforce reductions,” the company said.
Groupon’s stock stood at 88 cents in premarket trading, up 1.62%. It fell 3.16% Monday.