Groupon’s Shares Surge on Hedge Fund Investment

on Nov 21, 2012

Groupon shares (NASDAQ:GRPN), which until Friday of last week had lost 88.59 percent of their initial public offering (IPO) value, surged 9.5 percent on Tuesday to $3.40 after a hedge fund disclosed large positions in the stock.

**Groupon’s Backer: Tiger Global**
Tiger Global Management, a technology focused hedge fund run by Feroz Dewan and Chase Coleman, disclosed on Tuesday that it owns 65 million Class A shares in Groupon, representing 9.9 percent of the total Class A floatation. At yesterday’s closing price of $3.11, the position can be estimated at some $201.8 million (£126.6 million).

According to the Securities Exchange Commission (SEC), the stock was bought on 9 November, the day Groupon released disappointing third-quarter results and the share price tumbled hitting record lows of $2.60 on November 12. On Monday the stock price rose by 4.2 percent to $3.105 and after the closing bell, the hedge fund disclosed its stake in the company. In afterhours trading the stock rose a further 4 percent to $3.24.

According to news agency Reuters, Tiger Global was created by Chase Coleman, formerly a tech analyst at Julian Robertson’s Tiger Management, one of the most successful hedge-fund companies. Coleman split from his former employer in 2001 and launched Tiger Global with the support of Mr Robertson.
The new hedge fund invests primarily in internet companies including LinkedIn and Facebook. It also has a venture capital fund that invests in early-stage private companies such as Peixe Urbano, a start-up that is in direct competition against Groupon in South America.

**Groupon’s Concept Store in Hong Kong**
On Monday the company opened its first Concept Store in Hong Kong, enabling customers to experience the “Groupon lifestyle” in a tangible and interactive way. The new venue offers customers the opportunity to redeem lifestyle products and test them in a physical environment, thus closing the gap between the online and offline world.

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!m[The Daily-Deal Company Opens Its First Concept Store and Appoints New COO](/uploads/story/871/thumbs/title_pic_inline.png)”We’ve found many customers prefer picking up their Groupon products opposed to delivery in Hong Kong and as part of our commitment to our customers and the customer experience, the Groupon Concept Store is now launched.” said Danny Yeung, Chief Executive Officer and Founder of Groupon Hong Kong. “The store reinforces our commitment to bringing more value and a better experience to customers in Hong Kong.”
**New COO**
This week Groupon also announced that Kal Raman has been appointed as Chief Operating Officer in a bid to combat the company’s inability to expand its business overseas.
Mr Raman joined Groupon in April as a senior vice-president at global sales and operations. “In a very short time, Kal has had a significant impact on increasing the number and quality of local businesses using the Groupon platform to the benefit of Groupon customers around the world,” said Andrew Mason, CEO, Groupon.
Before Groupon, Kal Raman held managerial positions at eBay, GlobalScholar, Amazon, and Wal-Mart.
In a note to investors sent on Monday, Deutsche Bank analyst Ross Sandler wrote he is “warming up” to a possible upgrade of his current “Hold” rating on Groupon. He disagreed with the notion that “everything is imploding” in the deal-of-the-day business and said that the company’s North American operations are “fairly stable” although growth has slowed down compared to last year’s. Mr Sandler did point out however that the company’s European business “is still several quarters from stabilization” and has “significant issues”.

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