Groupon shares tumble as customer numbers increase

Published:  15 Aug at 9 AM

Groupon, the US voucher provider, has seen the value of its stock drop despite declaring a profit in the last quarter along with increased revenue. However, analysts in New York had expected the company to do much better causing shares to drop by more than a quarter.

Groupon said on Monday that net income had risen to $28.4 million in the three months ending in June compared to a $107.4 million loss during the same quarter a year ago. The firm also reported that revenues were up to $568.3 million, an increase of 45 per cent.

However, since last November, when Groupon launched on the stock market, the company has seen its shares lose around three-quarters of their value.

Revenues would have been higher if the firm had not been hit by a $32.4 million loss on exchange rates. The company also said that it had seen a 65 per cent increase in the number of active customers which has increased to 38 million.

Citi Investment Analyst, Mark Mahaney, said a fall in billings during the last quarter indicated that Groupon was suffering a deterioration of its core business and that it needed to come up with new initiatives to fill the gap.