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Why Groupon Might Be On The Rebound (For Real This Time)

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Why Groupon Might Be On The Rebound

A few things happened last week in Castle Groupon that led many in the media to sound optimistic about the daily deal giant’s future. Before we dip into the reasons for this newfound enthusiasm, let me quickly take a detour into what has not caused this reversal.

In an explosive exposé, Forbes broke down the seismic importance of an Andrew Mason Twitter rant in which the CEO griped about sandwich shops that give customers mayonnaise whether they asked for it or not. Some have incorrectly credited this surge of brutal honesty with Groupon’s recent 5 percent upgrade in its stock — and while there is something to be said for a company’s CEO being a regular human being who states his mind on social media, that isn’t why Groupon is starting to bounce back.

No, the 5 percent upgrade is due to Sterne Agee analyst Arvind Bhatia raising the company’s rating to buy, and he also predicts the company will hit $9 a share, which the company has not seen since last July.

It shouldn’t surprise anyone to learn that Groupon has been tinkering under the hood lately with its business model, trying out lots of new initiatives and also rethinking their old, core ones. But what has won Bhatia over is, according to a note to investors, Groupon has been quietly positioning itself “beyond the email in-box business.” He added: “Unlike Internet companies dependent on advertising models that are tougher to translate from desktop to mobile, we believe Groupon’s daily deal [and] marketplace business is a natural extension of its desktop business.”

Groupon’s stock is holding steady at around $6.09 as of press time. 

David Wolinsky is a freelance writer and a lifelong Chicagoan. In addition to currently serving as an interviewer-writer for Adult Swim, he's also a comedy-writing instructor for Second City. He was the Chicago city editor for The Onion A.V. Club where he provided in-depth daily coverage of this city's bustling arts/entertainment scene for half a decade. His first career aspirations were to be a game-show host.

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