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If you're looking for a speculative penny stock play in front of the Groupon IPO, then take a look at Local.com ( LOCM), which operates as an Internet search advertising company that enables businesses and consumers to find each other and connect locally. The bears have trashed this stock in 2011, with shares off by over 55%.

This company is extremely speculative, to say the least, since the stock trades at around $2.60 a share. That said, the firm just entered the daily deals space through its acquisition of Groupon-like startup Screamin' Daily Deals in July. The startup is estimated to have generated -- unaudited -- revenue of $2.4 million in 2010 and $4.4 million during the first half of 2011.

Local.com also just released its new mobile application for its Spreebird daily deals business. The apps allow its customers to search, buy and claim Spreebird deals on their cell phones. Obviously, Local.com is quickly moving into Groupon's space, so with just a $58.3 million market cap, this stock could easily double if traders front run the Groupon IPO with this speculative name.

>>5 Under-$10 Stocks With Big Upside Potential

The way I would play this stock in front of the Groupon IPO is to buy it once it starts to break out above $2.73 to $3.07 a share on heavy volume. Look for volume that's tracking in close to or above its three-month average action of 276,800 shares. You can also buy this off weakness just below its 50-day moving average of $2.55 and simply anticipate the breakout. Either way you trade it, make sure you have a tight mental stop in case the Groupon IPO isn't a hit.

The reason I think this speculative stock could easily double off a solid Groupon IPO is that Local.com has a very small tradable float of 21.89 million shares and a reasonably high short interest of 11.2%. If we see a short-covering rally kick off, then look for a big move in this stock in the coming days.

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