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(GRPN) - Get Groupon, Inc. Report

surged Thursday after the online retailer announced that Eric Lefkofsky had been named the Chicago-based company's new CEO.

Shares were soaring 26% to $10.98, its highest price since June 2012 but well off its record high of $26.19, reached two weeks after the company held its initial public offering raising $700 million on shares priced at $20.

Lefkofsky, one of Groupon's co-founders, was previously named interim co-CEO with fellow board member Ted Leonsis after former CEO Andrew Mason was


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in February in the wake of a series of disappointing financial results. The duo has searched for new expansion opportunities, including offerings through smartphones and tablets. Lefkofsky's 17% stake in the company makes him Groupon's largest shareholder.

"The Board is encouraged by Groupon's performance under Eric's leadership, and we're pleased that he has agreed to lead the company through this important stage of its evolution," said Leonsis, now serving as Groupon's Chairman, in a statement.

Groupon beat analyst expectations in the second quarter with its earnings report Wednesday. The company as revenue rose 7.1% to $608.7 million. Wall Street had expected to see a net loss of 3 cents a share, but saw the company only report a loss of 1 cent per share. Groupon was able to increase billings by 9.9% to $1.41 billion the last quarter. It projects third quarter revenue will come in between $585 million to $635 million. Lefkofsky has authorized a $300 million share buyback program.

Analysts saw expectations beat with the second quarter results but still remain cautious due to long term risks. According to data compiled by Bloomberg, 5 have placed a "buy" rating on the stock, 17 rated it a "hold" and 2 deemed it a "sell." UBS analysts have placed a $11 price target on Groupon stock.

While we remain guarded on LT value of the deal bank for merchants (due to potential pricing cannibalization), our cautious view on 2013 gross margins and CSOI estimates is not playing out and we are upping our rating to Neutral from Underperform," wrote Bank of America analysts, led by Justin Post, in a report released August 8.

-- Written by Robert Arenella in New York

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Robert Arenella