Reuters: Global Markets: Groupon shares drop on concern about merchants

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Groupon shares drop on concern about merchants Sep 17th 2012, 18:26 Tweet Share this Email Print Related Topics Hot Stocks » Asian Markets » People enter and leave Groupon Inc corporate office and headquarters in Chicago, Illinois, November 4, 2011. Credit: Reuters/Frank Polich By Alistair Barr Mon Sep 17, 2012 2:26pm EDT (Reuters) - Groupon Inc (GRPN.O) shares dropped 7 percent on Monday on concern about merchant demand for the company's daily deals. Raymond James analysts, led by Aaron Kessler, released a survey of more than 100 Groupon merchants on Monday showing these key partners have mixed feelings about working with the company. The survey found that 16 percent of merchants were "very satisfied" with running a Groupon promotion and 37 percent were "satisfied." However, a third were either "unsatisfied" or "very unsatisfied," while 39 percent of Groupon merchants are not likely to run another Groupon deal over the next couple of years, Kessler wrote in a note to investors. Groupon shares have lost about three-quarters of their value since the world's largest daily deal company went public last year. Accounting problems have plagued the company, while some investors and analysts worry that demand for daily deals is waning. "After astronomical growth in 2012, the online deals marketplace is showing signs of maturity," said Peter Krasilovsky, vice president and program director, BIA/Kelsey, which tracks local advertising and commerce. "There has been consolidation in the space, deal conversion rates may be suffering due to over-familiarity and the market may be near saturation." Groupon shares were down 7 percent at $4.90 on Monday afternoon on the Nasdaq. Evercore Partners analyst Ken Sena put Groupon on the firm's "conviction sell" list on Monday. Groupon may have to spend more on marketing, given "daily deal fatigue," Sena said. The analyst has a $3 price target and an "underweight" rating on the stock. (Reporting by Alistair Barr in San Francisco; editing by Matthew Lewis) Related Quotes and News Company Price Related News Tweet this Link this Share this Digg this Email Reprints We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/ Comments (0) Be the first to comment on reuters.com. Add yours using the box above.

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