NEW YORK (TheStreet) -- Shares of Groupon (GRPN) - Get Report closed up 1.47% at $8.26 today after it was reported that Goldman Sachs Group (GS) - Get Report plans to buy up to a 20% stake in Groupon's Korea-based ticket and ecommerce company Ticket Monster, the Korea Times reported.
Currently, Ticket Monster is 100% owned by Groupon, the world's largest social commerce company, the Korea Times said, adding that Groupon is also considering handing over managerial control, selling over half of its stake.
In October, Groupon said it hired advisers to evaluate financial and strategic options that could unlock shareholder value, citing the growth opportunities for South Korea's Ticket Monster and the rest of its Asian operations, Bloomberg reported.
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Groupon acquired Ticket Monster from LivingSocial in January for about $260 million.
Separately, TheStreet Ratings team rates GROUPON INC as a Sell with a ratings score of D. TheStreet Ratings Team has this to say about their recommendation:
"We rate GROUPON INC (GRPN) a SELL. This is driven by some concerns, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity and feeble growth in its earnings per share."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The company, on the basis of change in net income from the same quarter one year ago, has significantly underperformed when compared to that of the S&P 500 and the Internet & Catalog Retail industry. The net income has significantly decreased by 722.0% when compared to the same quarter one year ago, falling from -$2.58 million to -$21.21 million.
- Return on equity has greatly decreased when compared to its ROE from the same quarter one year prior. This is a signal of major weakness within the corporation. Compared to other companies in the Internet & Catalog Retail industry and the overall market, GROUPON INC's return on equity significantly trails that of both the industry average and the S&P 500.
- GROUPON INC's earnings have gone downhill when comparing its most recently reported quarter with the same quarter a year earlier. The company has reported a trend of declining earnings per share over the past year. However, the consensus estimate suggests that this trend should reverse in the coming year. During the past fiscal year, GROUPON INC reported poor results of -$0.14 versus -$0.10 in the prior year. This year, the market expects an improvement in earnings ($0.05 versus -$0.14).
- This stock's share value has moved by only 33.37% over the past year. Naturally, the overall market trend is bound to be a significant factor. However, in one sense, the stock's sharp decline last year is a positive for future investors, making it cheaper (in proportion to its earnings over the past year) than most other stocks in its industry. But due to other concerns, we feel the stock is still not a good buy right now.
- The gross profit margin for GROUPON INC is rather high; currently it is at 55.25%. Regardless of GRPN's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, the net profit margin of -2.80% trails the industry average.
- You can view the full analysis from the report here: GRPN Ratings Report