Analysts: Groupon's Finances to Get Worse Before/If it gets Better

When choosing a word to sum up Groupon’s current state of affairs, “collapse” might come to mind. But that isn’t quite the most accurate way of putting it. Groupon is more like a caterpillar in a daily dealing cocoon that will either yield an incredibly enduring spa-discounting butterfly or… it won’t.

The company is assumedly in triage mode attempting to turn everything around, and the big problem is that it’s become an international company thanks to a period of massive expansion before it had everything about its business model nailed down.

And, indeed, the company is still tinkering with what it’s doing, what it wants to do and everything in between. All of this has lead to a stock that’s bottoming out in single digits and an oddly silent CEO -- odd because this was a man who previously circulated footage of himself doing yoga in his underwear.

But it doesn’t seem like things are getting any better. In a note to investors, Edward Woo, a senior research analyst at Ascendiant Capital Markets wrote that “Groupon is likely, as the leading daily deals company with 50 percent market share, to experience no or negative growth in its deals business in the third quarter.”

Woo also predicted that staff turnover my increase the possibility for “near-term business disruptions.”

Oh, and he predicted Groupon’s stock will hit $3.50 this year. As of press time, it’s at $5.10.

Not so good. But still not as bad as what another analyst predicted: $4.

Some have speculated that this is ultimately good for the company. That it will lead to it reverting to a back-to-basics mode and subsequently becoming focused and stronger. It’s just that Groupon still seems to be struggling to figure out what those basics are.

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. When not playing video games for work he's thinking of dashing out to Chicago Diner, Pizano's, or Yummy Yummy. His first career aspirations were to be a game-show host.

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