Groupon’s Shares Surge Amidst Acquisition Rumours

April Davis By April Davis | 10 Jul 2018

Groupon’s shares have surged since reports leaked late last week that the online deals site is looking for a buyer.

The online deals site stock has had its best performing day on the market since February 2017, after Recode reported on Saturday that the business is reportedly looking for a buyer. Shares closed at $4.83 at the end of trade on Monday (an increase of 11 percent), after reaching a high of $4.96.

Company executives and bankers representing Groupon have reportedly approached a number of potential buyers over the past few weeks, with insiders saying the Chicago-based business is looking to sell. Groupon has been open to selling for a number of years, but according to Recode, the business has become more aggressive in its approach. Alibaba is rumoured to be a possible buyer, although sources close to the matter have suggested that IAC could show an interest as the company’s CEO, Joey Levin is also a Groupon board member.

It’s unclear at this stage whether Groupon was successful in securing a buyer, or if any offers have been made.

The last time Groupon experienced positive growth was back in February of 2016 when the daily deals site surged by 23 percent on the back of better-than-expected fourth quarter earnings. This increase in interest was also sparked by news that Chinese e-commerce giant, Alibaba had quietly purchased a 5.6 percent stake in the business.

At the time of Alibaba’s acquisition, analysts did speculate whether Alibaba would increase its stake in the business later in the year.

“I expect we’ll see Alibaba make a major move to boost its stake at some point later in the year,” said financial journalist, Doug Young, “with chances split 50-50 between a strategic partnership and outright acquisition.”

Groupon’s executives have reportedly approached Alibaba, which has led to speculation that Alibaba could still make its move two years after its initial investment.

Despite a boost in shares amidst acquisition rumours, Groupon is still down by roughly five percent for 2018 and is still operating below its 52-week high of $5.99.

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