NEW YORK (TheStreet) -- Shares of Groupon (GRPN) - Get Report were falling 18.54% to $4.28 on heavy trading volume early Thursday afternoon after the company said yesterday it would acquire online marketplace LivingSocial.
Groupon expects the deal to close by early November. The company did not disclose financial terms, as the acquisition consideration "is not material," according to a statement.
Buying LivingSocial will unite the two daily-deals providers' markets and add about one million active customers to Groupon, the Wall Street Journal reported.
Consumers and merchants have pulled away in recent years from daily discounts like those offered by Groupon and LivingSocial, the Journal noted.
LivingSocial is reportedly worth in the low tens of millions of dollars today, down from its peak of about $4.5 billion in 2011, according to Mashable.
Additionally, Chicago-based Groupon posted a loss of one cent per share for the 2016 third quarter late yesterday, meeting analysts' projections.
Revenue rose 1% year-over-year to $720.5 million and beat Wall Street's estimates of $710.5 million. Gross billings declined 2% year-over-year to $1.43 billion in the quarter.
Groupon added 1.2 million North American users in the 2016 third quarter to total 29.1 million customers in the region.
For fiscal 2016, the local marketplace operator expects revenue between $3.08 billion and $3.15 billion vs. its prior view of $3.00 billion to $3.10 billion. Wall Street is modeling revenue of $3.10 billion.
More than 25.10 million Groupon shares have traded so far today vs. the 30-day average of 5.82 million.
Separately, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rated this stock as a "sell" with a ratings score of D.
The company's weaknesses can be seen in multiple areas, such as its deteriorating net income, disappointing return on equity, weak operating cash flow and feeble growth in its earnings per share.
You can view the full analysis from the report here: GRPN