Groupon Stock: Change In Strategy

Groupon (GRPN), one of the largest flash deals marketplaces; according to reports is buying warehouses in North America for storing full priced physical goods. Now why would a flash deals provider buy warehouses? The only answer to that question is a change in strategy as Groupon looks to further its physical goods business. Just like other flash deal competitors, Groupon has reportedly been reducing its focus on the flash deals segment.

According to the Groupon’s latest quarterly report for the June ending quarter, revenues from direct sales accounted for 30% of total revenues. Following the ouster of Andrew Mason as CEO, new CEO Eric Lefkofsky has a clear focus to move into a physical goods business which will make up a larger part of Groupon revenues. He also believes that bringing the shipping in-house will help Groupon improve margins in its direct sales. The company will continue to offer steep discounts on some of its physical goods products as it aims to increases its presence in the discounted goods division vis-à-vis the daily deals segment. Groupon stock has gained 15% since it announced its quarterly earnings and appointment of new CEO Eric Lefkofsky on August 07, 2013.

Groupon stock price chart

Groupon stock chart
Source: Groupon stock chart by Amigobulls

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Neither Amigobulls, nor any members of its staff hold positions in any of the stocks discussed in this post. The author may not be a certified/registered investment advisor, and the opinions expressed should not be treated as investment advice. Buying and selling of securities carries the risk of monetary losses. Readers/Viewers are advised to carry out their own due diligence and consult their investment advisors before making any investment decisions. Neither Amigobulls, nor the author have any business relationship with any of the companies covered in this post.

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